Polkadot is a platform on which blockchain networks are built and connected into one unified network. It is essentially an L0 on which L1 networks are built. Kusama is like Polkadot’s cousin. It is similar in a lot of ways, and is considered the “canary” or “testing” network. The blockchain networks built on Polkadot are called parachains. Polkadot serves as the decentralized blockchain that connects all of these parachains and allows them to communicate seamlessly and efficiently. The result is that it becomes extremely easy to create fast, scalable parachains. Using Polkadots infrastructure, allows developers to take advantage of Polkadot’s shared security (this is provided by validators of the Polkadot Relay Chain).
Here’s a graphic from @danreecer_ that can help you visualize Polkadot’s role in the blockchain ecosystem.
Polkadot’s main goal is to be scalable. Dr. Gavin Wood, @gavofyork, founded Polkadot after inventing the Ethereum Virtual Machine and the Solidity programming language for Ethereum. He believed that Ethereum would not scale well, and thus, Polkadot was born. Polkadot will serve as a decentralized blockchain that connects other blockchains and enables permissionless communication between them. Accomplishing such would revolutionize the way blockchains operate with one another. It would allow for scalability alongside a growing user base and supplant the need for a centralized network.
These are the six key challenges that Polkadot is solving:
Polkadot’s parachains are individual blockchains dedicated to a specific application. These can range from DeFi to gaming. By allowing for independent blockchains to be developed, we can see some truly interesting use cases:
- Liquid staking — allows anyone with a staking token to get immediate liquidity without a lockup period by obtaining a tradable, synthetic token in the process
- Acala — is building a decentralized stablecoin called $aUSD that allows users to send and receive USD across any blockchain connected to the Polkadot network.
DeFi built on Ethereum, Cosmos, or Bitcoin will be able to communicate within the Polkadot ecosystem using a bridge. This is going to give future applications and users a lot of flexibility. In fact, widespread adoption of Polkadot could really change the way we use blockchain for the better.
And what is Kusama? Kusama is the exact same as Polkadot. There is one key difference though. Kusama is built for speed and experimentation. Teams can:
- Run networks in parallel on Polkadot and Kusama
- Launch on Kusama, then move to Polkadot
- Run a network exclusively on Kusama
Kusama is a connected network of specialized blockchains built for speed and innovation. It is an experimental main net.
To use the Polkadot and Kusama networks, parachains must be leased. So far this leasing has been done through auctions and staking $DOT or $KSM. Last June Statemine the first parachain was officially launched on Kusama.
After the first set of auctions, the Kusama crowdloans locked a whopping 31% of total supply! Another 41.7% is currently staked, so in total only 28% of all KSM is currently circulating.
Here’s a list of the $KSM auction winners:
The second Polkadot parachain batch is proceeding as planned. Efinity took the first slot with 7.6M DOT committed, which is lower than any of the other five! That makes sense, since the second batch only goes live in March.
There are implications from this much of the $KSM and $DOT supply being locked up. As more projects enter the networks more $KSM and $DOT will get locked up. This is going to drive price up greatly. As more networks build on Polkadot its growth will only speed up. Polkadot is still in it’s early phases, so there is a lot of opportunity in $DOT and$KSM right now.
Resources:
- Here’s a cool video by the acala network that explains the Polkadot and Kusama Network in more depth: https://youtu.be/Pr2vSis8jnc
- Also check out this prime on Polkadot and Kusama https://kraken.docsend.com/view/u5249fzsjd724ajg
