Polkadot: as the crypto winter spares no corner of the industry, web3 and blockchain platforms are taking a step back, says James Wofounder and CEO of Digital Finance Group.
Despite the crisis, web3 has an important advantage over other crypto segments, as it is moving towards a concrete goal, namely: the complete transformation of the Internet as we know it today. Thus, truly web3-focused projects work on technology rather than price movements.
The pillars of this new version of the Internet have already been laid, but the lack of interoperability is still a problem. Today, many new blockchains are trying to solve this problem.
Imagine not being able to use Google or another search engine to browse the web. Of course, the youngest among us cannot even imagine such a scenario, because the Internet has been working like this for years. Simply put, interoperability is paramount. So how can we create the infrastructure of the new Internet if blockchains cannot communicate with each other seamlessly?
The web3 version of Google – whatever its nature – cannot yet see the light of day. Indeed, there are no standards for data transmission. This means that blockchains operate as isolated networks. However, the Polkadot multi-channel network has proposed several solutions to this problem. Today, he is a model for web3 platforms wishing to follow in his footsteps.
The importance of quality and community
In the early days of web1 and web2, active communities of developers had creative energy. An energy that has changed every aspect of our daily lives thanks to companies like Google, Facebook, Spotify and Uber.
Unfortunately, many web3 projects neglect this basic element of Internet culture and technology applications. Even before taking off, they are betting everything on expansion and monetization. However, interoperability could be a game changer.
By design, parachains have all the necessary means to position Polkadot at the forefront of interoperability. Since they share a common environment based on trustless interactions, parachains remove the need to create new blockchains from scratch.
According Messari, the Polkadot community is the second most active community of developers, after that of Ethereum. One could attribute this success to the ease of use of the platform. Indeed, Polkadot’s parachain technology is based on a unique blockchain architecture managed by some of the best developers.
The Polkadot Developer Community
In the first half of 2022, the Polkadot ecosystem maintained a monthly average of 11,000 development activities. This is an incredible feat compared to other networks like Substrate, which is larger, but more complex. That said, the strength of the Polkadot community doesn’t come from these numbers alone.
Most people would say Solana or Avalanche have a more active community. However, Polkadot-based projects stand out in both quality and quantity. For example, according to Polkaproject, some of Polkadot’s best projects are developing parachains on Layer 1. Something that would be much more complex on any other network. As Polkadot grows, the number of parachains should double from 21 to 41 by February 2023.
Indeed, the network has managed to create groups similar to web2 communities. Additionally, Polkadot uses Kusama as a Sandbox to test all new innovations before integrating them into the central blockchain. The aim is to encourage innovation and experimentation within the network.
Polkadot is moving slowly but surely
While Polkadot is building its community, the protocol can’t scale its technology without coming up with new use cases. For example, he can launch an app or program that encourages the active participation of community members.
It can also be modeled after STEPN, a Solana-based app that combines fitness trackers with web3 games. Currently, STEPN’s total user count hovers around one million, while its daily active user count has recently passed the low mark. 800 000. A very high conversion rate which probably includes newcomers to the sector.
Despite a relatively slow launch, Polkadot’s mainstream parachains are already performing very well, with a total value locked of over $1.5 billion. Other major networks may have grown faster. However, moving at high speed today only to face big problems later is not always the most efficient way to maintain a stable web3 environment.
Admittedly, expanding at high speed can be very tempting. However, this risks creating significant obstacles that will prevent the network from functioning well in the future. In the end, the entire network of users will be affected, while the project will be drowned in its problems.
Thanks to XCM, a format of cross-chain messaging which solves problems with cross-consensus network communications, Polkadot was able to immediately address its operational issues. As a result, its cross-chain trading volume increased to $63 million.
During the two crypto bull markets that took place between 2017 and 2021, everyone was focused on general support, financing of crypto projects and technological innovations. Although it’s hard to imagine now, the next bull market will demonstrate that interoperability is the main driver for building a strong web3. The projects best prepared for this transformation are ETH 2.0, Cosmos and Polkadot.
Polkadot vs Cosmos
The Cosmos blockchain also offers an interoperable network that allows interconnected applications and chains to grow. Polkadot has more validators than Cosmos and offers a higher level of security. That said, both blockchains share the same philosophy and are working on concrete projects to enter the era of interoperability as complete cross-chain environments.
The bear market is eliminating the less sustainable platforms. It is therefore necessary to focus on projects and communities that prepare the ground for a solid and entirely blockchain-based web3. An ecosystem of small networks and separate projects will not help build the Internet of tomorrow.
Polkadot is now an important part of the crypto ecosystem. Indeed, the network is setting the future standards for blockchain innovation. In this way, it helps to create a truly decentralized and interoperable blockchain internet.
About the Author
James Wo is the founder and CEO of Digital Finance Group, a crypto fund established in 2015. A seasoned crypto-asset investor and entrepreneur, James has grown his company’s total assets under management to $1 billion. He is also an early investor in several major companies like LedgerX, Coinlist, Circle, and 3iQ.
A big supporter of the Polkadot and Kusama networks, James actively contributes to the ecosystem with funding, donations, and parachain auctions. In addition, James is a member of the Board of Directors and the Chamber of Electronic Commerce Committee of the Emirati subsidiary of Matrix Exchange.
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