Polkadot’s Gavin Wood Rails Against Ethereum’s “Economic Enslavement”
Polkadot founder Gavin Wood didn’t mince words on Ethereum (which he helped co-found) and its economic model.
Covered:
- Polkadot v. Ethereum
- Parachains, Explained
- DOT Token
Gavin Wood: Polkadot v. Ethereum
Polkadot’s Founder, Gavin Wood, had some choice words for Ethereum. In an interview on Friday, Wood promised that Polkadot and its parachain auctions would free the users from the “constraints” of Ethereum’s Network. The constraints, he described, are akin to being “enslaved to it in an economic sense.”
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Gavin Wood helped found Ethereum and create the Solidity programming language still used in smart contracts today. He said that the first parachain auction which was completed yesterday would unleash a new era for the layer-1 smart contract space. He says that the parachain model truly separates Polkadot from its competitors because users don’t need to buy a gas token or know really anything about the DOT token. Speaking of the contrast,
Wood said: “These users have to own ether on Ethereum and oftentimes some other token that allows them to use whatever application that is built using Ethereum smart contracts. This is a huge limitation.”
Wood later added, “The users of applications that are built on Ethereum are enslaved to it in an economic sense,” he said. He compared the fact that you have to spend ETH as a gas token to interact with any dApp on the network with the idea of having to pay Google every time you make a Google search.
“This is the key difference between the application model of free execution with Polkadot versus the smart contract model of transactive execution that you get with Ethereum and Ethereum’s competitors,” Wood said.
Parachains, Explained
The Parachain concept can be understood simply as allowing dApp developers to build their own blockchains with their own rules and will allow for seamless interoperability. The security comes from the relay chain which connects the parachains and plays a key role in their proof-of-stake consensus mechanism.
Acala secured the first parachain slot with over 32.5 million DOT contributed to win the auction. According to Acala, over 81,000 community members contributed to the auction. Acala seeks to be the ‘DeFi hub’ for Polkadot. Acala will then distribute “105,893,309.1 ACA tokens to its community of contributors.” Acala wants to build out an AMM on Polkadot, liquid staking, and a decentralized stablecoin called aUSD.
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There are only 100 parachains that will ever exist on Polkadot. These blockchains will connect to the relay chain and make the network scalable and interoperable. For each auction, projects must raise funds in DOT from their communities. “The DOT gets locked until the parachain lease expires.” Then the projects will reward the contributors with a native token of some sort.
The second batch of parachain auctions will begin on Dec 23, and will last seven days. This will happen every two weeks until all the 100 slots are filled.
Wood believes this concept will secure Polkadot as the leading layer 1 in the space. In the interview, he continued to rail against Ethereum, stating that Ethereum is like Bitcoin “but with some extra scripting.” He mentioned that miners being able to choose what transactions they decide to include in each block is a problem for ETH and BTC.
Gavin Wood: DOT Token
Polkadot posits the economic model of parachain auctions that allow for ‘parathreads’ as “somewhere between a parachain model and the smart contract model where users pay.” There is a big difference though. On Polkadot, Wood says users “don’t have to hold the token and don’t have to pay for the application.” He said dApp providers have much more freedom in that they are not forcing users to have exposure to the DOT token and provides for more technical freedom and to “actually use the full gamut of blockchains capabilities.”
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DOT has not performed as well as other Layer 1’s year-over-year, with many projects built on DOT tokens failing to generate any hype or significant amount of users. However, parachains were always the ace in their hole, but the first successful auction didn’t move the needle for DOT.
For some reason, DOT has failed to generate a lively community, unlike Avalanche, Cardano and Algorand. However, it is still up 54% in the last 90 days compared to Cardano, which is down 25% in that same timeframe.
In light of all this, DOT Could be the Layer 1 that finishes the strongest in 2021–they certainly have room to run, far off from their ATH of $55.0 and simply haven’t seen the “giga-pump” that many of their competitors have this year.
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Text source: CryptosRus
