Polkadot (DOT): What can ETH competitor do?
2 min readPolkadot (DOT) has strong backing with Ethereum co-founder Gavin Woods. The project has been committed to interoperability from the start. The project wants to provide a bridge between different cryptocurrencies or blockchains. The so-called parachains play an important role here.
Polkadot (DOT): Building bridges with the Relay Chain
The basis for this project is the relay chain. This blockchain is the heart of the Polkadot blockchain. It has interfaces, so-called slots, through which other networks can connect to Polkadot.
In order to accomplish this, “parachains” are used again. These can exchange data and assets with each other within the network and connect to other, external networks via bridges. They dock to the slots and stretch their arms in the direction of other blockchains.
As a result, Polkadot creates a special degree of flexibility. One of the aims of this is to solve the blockchain trilemma. This is the general difficulty of balancing scalability, security and decentralization.
Bridges that have already been named also make it possible to transfer Bitcoin to the Ethereum blockchain. This in turn makes it possible to use Bitcoin in the DeFi area as well.
The network is secured using a proof-of-stake mechanism. To maintain security in this consensus, there are monetary incentives. Because anyone who agrees to secure the network and deposits their DOT coins in the network will receive additional coins in return.
The DOT token and its role in the network
In addition to the staking functions already mentioned, the DOT token has additional functions. They are also needed to create new blockchains and connect them to the relay chain. DOT is also a governance token. It is also used to participate in decisions in the network.
