Fresh off Polkadot parachains going live officially, we are asking the question, is Polkadot poised to be the “Meta-Chain?” And, if so, what does that mean for DOT’s price?  Covered: The Journey To Polkadot Parachains Is Complete Polkadot As The Meta-Chain DOT Token Value Journey To Polkadot Parachains Polkadot is far and away the most […] The post Why Polkadot May Dominate 2022 As The ‘Meta-Chain’ appeared first on CryptosRus.

Why Polkadot May Dominate 2022 As The ‘Meta-Chain’

Fresh off Polkadot parachains going live officially, we are asking the question, is Polkadot poised to be the “Meta-Chain?” And, if so, what does that mean for DOT’s price? 

Covered:

  • The Journey To Polkadot Parachains Is Complete
  • Polkadot As The Meta-Chain
  • DOT Token Value

Journey To Polkadot Parachains

Polkadot is far and away the most well-known yet disregarded Layer-1 in the space. Well, I should say Layer-0, but we will get to that in a second. In many ways, that’s part of the problem. That is to say, the idiosyncratic approach by Gavin Wood and company to solving interoperability and the other bottlenecks of Layer-1’s has held DOT back in terms of price action and adoption.

But all that is about to change. Today, the five-year-long endeavor of Polkadot’s Parachains has finally come to fruition. Acala, Moonbeam, Parallel Finance, Astar, and Clover are the DeFi projects which have won the Parachain auctions, which means, in essence, these protocols are leasing a slot on Polkadot’s Relay Chain for up to 96 weeks at a time.

Simply put, these projects rent a Parachain slot, and these run “parallel” to the Polkadot Relay chain, which is the chain that hosts the Parachains, and “coordinates” the consensus, meaning the production of blocks.

Recommended: What is Polkadot?

It is similar to Ethereum’s Beacon chain in ETH 2, with the shard chains being where the execution of the smart contracts take place, thus distributing the potential computational congestion. Polkadot’s Relay Chain actually has no smart contract functionality, rather, the logic is programmed by developers into each individual “blockchain” that is housed in the parachain slot. This is because Polkadot is not really a Layer-1, it is a Layer-0.

Meaning, the parachains are blockchains themselves. Polkadot is a network to house multiple blockchains, not multiple protocols. Unlike an EVM, there is no Virtual Machine, where developers write smart contracts that all execute on and interface with a Virtual Machine.

So to reiterate, Polkadot is built to house a network of blockchains, not a network of individual protocols. These chains can be easily built with a modular framework called substrate. That is where interoperability comes into play. There are 100 Parachains, which again are “sovereign blockchains that work in parallel with a high level of security.”

Polkadot As The Meta-Chain

Moreover, Polkadot itself is agnostic to the consensus mechanisms of connected parachains. This means any consensus mechanism can work if it’s in a parachain slot, whether it’s Bitcoin’s PoW, Cardano’s Ouroboros PoS, Algorand’s Cryptographic Sortition PoS, Solana’s proof-of-history, anything.

That is mind-blowing. 

There is also the pooled security of the relay chain and its overarching consensus mechanism called proof-of-authority. So blockchains (parachains) can be built without even having to consider consensus — they are renting it from the relay chain.

This ‘pay-as-you-go system’ is ingenious and extremely complex. In many ways, Polkadot is like the world-wide-web, the underlying architecture, and each blockchain is like a website. Except with Polkadot, all the blockchains are composable.

“Connecting to the Polkadot Relay Chain enables blockchains to send transactions between one another seamlessly, thus providing true interoperability between networks.” Because smart contracts are not executed on the relay chain (base layer), the scalability is massive.

So, if you can’t tell already, Polkadot was not meant to be an upgrade to Ethereum, like many say that Avalanche is, for example. It is a complete overhaul of the way blockchains are structured. Perhaps you could say Polkadot is aiming to be the meta-chain. After all, Gavin Wood, founder of DOT, did invent the term Web 3.0.

Think about it, Polkadot and the innovation thereof is ‘beyond’ Polkadot itself, it’s solution is to connect blockchains with itself being the meta-chain. The idea of Polkadot is to transcend the current paradigm of blockchain and online communication in general. When you think about it, the metaverse is another way to say ‘bottom up composability’, and that’s what Polkadot is bringing; not at a protocol level, but an infrastructural level.

DOT Token Value Post Polkadot Parachains

Polkadot is not meant to kill Ethereum; Polkadot is actually designed to be the blockchain Yogi…

So, where does the DOT token fit into this? Well, number one, you don’t need the DOT token as a gas token like you do with any other chain, which is another innovation. So, where’s the demand?

The demand, and this is crucial, is the fact that to lease 1 of the 100 parachains, you need to raise DOT and bond it (lock it up) for as long as you are leasing the slot. In the case of Acala, the auction resulted in “32.5 million DOT contributed to winning the auction”, which means that DOT is bonded and is a form of staking. Number two, as a validator, you stake your DOT on the network to confirm transactions on the relay chain. Through this you earn a yield. The more validators there are, the more parachains become available. DOT is also a governance token.

So the Parachains are live, and DOT really hasn’t moved an inch in price compared to its competitors. However, I think that is set to change, and fast. While being a stalwart in the top ten, DOT has yet to have its “moment.” The lofty and arguably grandiose design of DOT has held it back from practical adoption, in many ways becoming a victim of rigor and complexity, like Cardano.

However, the table is set, and the idea that Polkadot is the landlord of this digital “real estate” architecture for blockchains and Web 3.0 in the form of parachains seems almost too good to be true. If it’s not, then Polkadot may be the dominant chain of 2022, and the DOT currency may be in high demand as the “shareholders” want a say in the kingdom’s direction.

Polkadot is not meant to kill Ethereum; Polkadot is actually designed to be the blockchain Yogi, by which all the different and unique celebrities like Mick Jagger, John Lennon, and Mia Farrow come to the Ashram and unite under one roof.

Recommended: Three Top Play-To-Earn Games On Polkadot You Have To Check Out

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