Let’s Talk About: Polkadot

SUMMARY

The Polkadot Network aims to become the cryptocurrency backbone for transaction sequencing and relaying. Founded by Dr. Gavin Wood, co-founder of Ethereum, Polkadot breaks down the traditional responsibilities of a network node and offers them out to individually incentivises parties.

Although the network is touted as scalable across blockchains, there are many limiting factors that make roll out questionable in blockchains other than Ethereum. Additionally, with Ethereum 2.0 scheduled to be released soon, it is unclear what long term benefit a third-party relay chain will have in the ever-broadening ecosystem. Within the Ethereum space, though, the flexibility that Polkadot contracts could offer may be considered a valid option for start-up ERC20 tokens. With the current rise in DeFi projects (read more about their risks here), access to immediate scalability could be a benefit worthy of the cost premium that comes with maintaining the bridge contracts.

As in investor. the opportunities in Polkadot, outside of trading its price volatility, are unclear. The risks of failure with this type of project are significant, and there is a reliance of external market actors for the key concepts to be able for fully reach their potential. While it cannot be ruled out that such actions are indeed possible, cryptocurrencies have never been known for their affections for working together for the common good.

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