Can Polkadot go through bulls and bears and create another glories?

Blockchain is a field full of innovation and change. Every round of bull market will give birth to a batch of new projects and concepts, and every round of bear market will eliminate a large number of projects that are not good enough or cannot keep up with the times.

Looking at the blockchain projects on the market, there are two main models:

The first is to be depressed. Relying on attractive concepts, technologies, teams, etc., this type of project has a wave of rise in the early stage, and then the value drops. In the next round of bull market, it will only rise to a certain extent, but it cannot return to the previous high. This is the fate of most projects. Of course, there are more projects that were short-lived and then failed, and disappeared in the next round of bull market.

The second is to cross the bull and bear. This type of project also experienced conceptual hype in the early stage, and then the bubble burst. However, in the bear market, they were able to recharge their energy and build continuously, and finally crossed the bull-bear. In the second round of the bull market, relying on the innovation accumulated in the bear market to surpass the previous high. These projects often experience multiple large fluctuations, but each time they are able to recover and create new historical highs. This is because they have strong communities, developers, funding and ecological support, as well as evolving narratives and innovations.

So what kind of model will Polkadot be? Can Polkadot go through bulls and bears to re-embody its value? The following aspects may provide us with some reference.

1. Does the team continue to build?

Polkadot’s development team is very active. According to Electric Capital’s report, Polkadot has one of the largest developer communities in the blockchain industry, with 750 full-time developers and a total of 2,000 developers.

The development of Polkadot has also been advancing steadily. Since the launch of the Polkadot mainnet in May 2020, a number of important milestones have been completed, such as on-chain governance, parachains, HRMP (horizontal relay routing) cross-chain of parachains, etc., and Substrate, XCM (Cross-consensus message format), the second-generation governance system OpenGov, system parachains and other functions that were not mentioned in the original white paper.

Polkadot released version 1.0 in August 2023, marking that it has realized the vision in the white paper and become a scalable, interoperable, secure and innovative blockchain network.

Polkadot’s development capabilities are also beyond doubt. Gavin Wood, the founder of Polkadot, is also the founder of Ethereum. He led the development of the first client of Ethereum, and is also the author of the Ethereum Yellow Paper and the Solidity smart contract language. Polkadot’s development team Parity has very rich development experience.

2. Does the narrative keep pace with the times?

The core narrative of Polkadot is to build a scalable, interoperable, and shared security multi-chain blockchain network. Its Substrate framework allows anyone to easily develop their own custom application chains and connect to Polkadot through auction slots It becomes a parallel chain, and cross-chain communication is realized through technologies such as XCM and HRMP between parallel chains.

The Polkadot narrative is also evolving. Recently, Gavin Wood, the founder of Polkadot, proposed the vision of Polkadot 2.0, proposing that Polkadot will use Coretime instead of the chain as the core, so that applications can use Polkadot’s computing resources more flexibly.

Coretime refers to the computing resources contained in each block on the Polkadot relay chain, which is similar to the computing resources provided by cloud computing service provider AWS. Coretime allows parachain developers to allocate their computing needs more flexibly, and can compete for Coretime through slot auctions. The emergence of Coretime makes Polkadot more like a decentralized cloud computing platform rather than just a blockchain network.

3. Whether the funds for ecological development are sufficient

Many well-known institutions have invested in Polkadot and held DOT for a long time, such as Polychain Capital, a16z, Pantera Capital, etc. These agencies provided not only funding but also strategic, technical and community support.

In addition, the Web3 Foundation Grant and the treasury on the chain have also provided sufficient funds for the development of the Polkadot ecosystem.

The Web3 Foundation Grant is a fund that supports the development of Polkadot ecology and wider Web3 projects. It has funded more than 500 projects, covering infrastructure, tools, parachains, bridges, decentralized applications and other fields.

The treasury on the chain is Polkadot’s built-in financial system, which allows DOT holders to vote on how to allocate funds on the chain to support various proposals that are beneficial to the development of Polkadot. The funds of the on-chain treasury come from block rewards, transaction fees and slot auction rents.

According to the data compiled by Polkadot Insider, Polkadot’s spending in the last 7 days reached 11.8 million, accounting for the third place in all blockchain ecology (after Solana and Tron).

4. Is there an advanced governance system

Polkadot had the most advanced on-chain governance system (Gov 1) in the blockchain industry at the beginning of its birth. This year Polkadot further upgraded the governance system and launched OpenGov. OpenGov is carried out on the chain from proposal, decision-making to execution, and proposal voting is determined by DOT holders. OpenGov enables Polkadot to implement upgrades in an efficient and orderly manner, and can rationally use treasury funds to develop the ecology.

5. Whether it can effectively tap and cultivate talents

Polkadot attaches great importance to the mining and training of talents, and uses various methods to attract and train more talents to join the Polkadot ecosystem.

Polkadot Blockchain Academy (PBA) is an offline course. The teaching team is composed of core engineers of the Polkadot ecosystem. The goal is to train potential developers into excellent blockchain developers. PBA will teach the basic knowledge and practical skills of Substrate, as well as theoretical knowledge such as economics, governance, game theory, cryptography, and distributed systems, so that students can develop their own parachains or decentralized applications. At present, PBA has opened three phases and trained 203 graduates. Many graduates have obtained job opportunities in the Polkadot ecosystem or created their own entrepreneurial projects.

The Substrate Builders Program is a six-month accelerator program divided into three tracks: chain, application and infrastructure. It provides technical, marketing, and community support for Substrate projects at various stages, helping the team bring the project to market. Parity also launched the Builders for Builders project to empower parachains to develop their own Bulider Program and cultivate more projects for the ecology.

Polkadot also launched the “Developer Hero Program”, with the goal of building a developer collaboration community, cultivating and rewarding outstanding Web3 developers, encouraging them to share their blockchain knowledge, improve their Web3 engineering skills, and expand Polkadot’s developer community.

In addition, Polkadot holds hackathon development competitions in Asia, Europe and other places every year to dig out early projects for the ecology.

6. Is there mass adoption?

Polkadot has achieved many eye-catching partnerships in the past year, many of which are large companies in traditional fields, including the well-known communications manufacturer Vodafone and the world’s largest accounting firm Deloitte. These cooperations show that Polkadot is not only innovative in the Web3 field, but also influential in the enterprise field.

However, there are currently no large-scale “out-of-circle” applications in the Polkadot ecosystem, that is, those applications that can attract a large number of non-blockchain users or mainstream users. This may be because there is still a certain threshold for joining Polkadot, especially the relatively high cost of slot bidding in the early stage. In addition, although Polkadot provides great technologies, the innovations that these technologies can be used to do are still in the exploratory stage. Polkadot needs more time to polish its own products and services, and needs more education and promotion to expand itself influence.

7. Whether there are a large number of active users and activities on the chain

There are already many excellent projects in the Polkadot ecosystem, including DeFi, identity verification, data storage, cloud computing, games, social networking and other fields. These projects provide Polkadot users with rich and diverse services and experiences. According to Subscan’s data, the average daily active users of the entire Polkadot and Kusama ecosystem (including parachains) is about 12,000-18,000, which shows that the Polkadot ecosystem already has a certain user base and activity. With more adoption of Polkadot, there is still a lot of room for active users to grow.

Summarize

Polkadot has an experienced development team, a narrative that keeps pace with the times, sufficient development funds and an advanced governance system, and has been digging and cultivating development talents. It is an innovative and dynamic blockchain platform with great potential.

Whether Polkadot can go through bulls and bears and truly demonstrate its value depends more on whether its technology and products can match the market, and create some “out-of-the-circle” applications in the ecology to attract more users and assets.