{"id":330728,"date":"2021-08-26T20:00:00","date_gmt":"2021-08-26T17:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem\/"},"modified":"2021-08-26T20:00:00","modified_gmt":"2021-08-26T17:00:00","slug":"will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem\/","title":{"rendered":"# Will Polkadot save decentralized finance from Ethereum\u2019s scaling problem?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a285fd71947a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a285fd71947a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem\/#Does_Polkadot_Deliver_What_Ethereum_Promised\" >Does Polkadot Deliver What Ethereum Promised?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem\/#No_Smart_Contracts_on_Polkadot\" >No Smart Contracts on Polkadot<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/will-polkadot-save-decentralized-finance-from-ethereums-scaling-problem\/#Rebuilding_Ethereums_Network_on_Polkadot\" >Rebuilding Ethereum\u2019s Network on Polkadot<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Will Polkadot save decentralized finance from Ethereum\u2019s scaling problem?   <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDgvZWM4NzJkZjYtNDFjNS00MjA1LWE0YjctYjNhYTM3MjU5ZTk2LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>Web3, interoperability, and layer 0 are all terms tossed around when describing Polkadot. But what do they mean, and how will they impact the Internet and cryptocurrency market? Cointelegraph Research\u2019s new report explores how Polkadot is tackling distributed ledger scalability and centralization of the web simultaneously.\u00a0<\/p>\n<p>For starters, imagine a world where Facebook is replaced by a decentralized <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social media<\/a> <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication built on Polkadot. This is what projects like Subsocial are building in their platforms, which lets users determine what data to keep private and to share. Users can profit from selling their data stored in the blockchain to 3rd party companies by minting Ocean Protocol tokens, OCEAN, and selling them on a decentralized exchange like Polkadex.<\/p>\n<p>Not happy about the bank charging overdraft fees when your account balance reaches below $0.00? Well, one Polkadot-based project called Acala has built an onchain automatic scheduler that is similar to a decentralized version of S<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">trip<\/a>e. This enables users to automatically transfer staking rewards to their wallet address, which can be linked to a physical credit card. This means that a person can be paid for helping to secure a decentralized money and banking system, and that the money they earn can be sent to a credit card and used to buy a coffee at Starbucks. <\/p>\n<p>This report covers: <\/p>\n<ul>\n<li>How Polkadot allows blockchains with different structures to co-exist in an interoperable environment with shared security.<\/li>\n<li>How the system of slot auctions allows projects to compete for the right to remain connected to the network.<\/li>\n<li>How the ecosystem around Polkadot gave rise to a wide variety of decentralized products, from social networks to cloud computation and prediction markets.<\/li>\n<\/ul>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/docsend.com\/view\/26jcif7ev72rfphr\"><em><strong>Download the full report here, complete with charts and infographics.<\/strong><\/em><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Does_Polkadot_Deliver_What_Ethereum_Promised\"><\/span>Does Polkadot Deliver What Ethereum Promised? <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Ethereum\u2019s consensus mechanism forces all nodes to validate all transactions. In contrast, the Polkadot blockchain breaks up batches of new transactions into many shards and processes them in parallel. The blockchains plugging into the network can have very different rules of operation, transaction processing, and capabilities, giving the whole system much more flexibility.<\/p>\n<p>Polkadot is trying to achieve scalability without decreasing the network\u2019s security. This famous problem known as the \u201cblockchain trilemma\u201d was elucidated by the founder of Ethereum himself, Vitalik Buterin. <\/p>\n<p>In contrast with Ethereum\u2019s single blockchain design, Polkadot has many different blockchains called parachains that plug into one main blockchain, also referred to as the Relay Chain or layer 0. Similar to the hub and spoke model commonly used in airport design, connecting disparate blockchains via the central Relay chain establishes a way to send messages and transactions across multiple blockchains without slowing down traffic on the transaction highway. Layer 0 refers to the concept that Layer 1 protocols such as Bitcoin and Ethereum could be spokes and Polkadot could be the hub. For example, the NFT project Bit.Country is a Substrate-based blockchain that uses a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/chainbridge.chainsafe.io\/\">bridge<\/a> with Ethereum. This enables assets to flow between Ethereum and metaverses built on Bit.Country\u2019s TEWAI blockchain. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"No_Smart_Contracts_on_Polkadot\"><\/span>No Smart Contracts on Polkadot <span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Since Polkadot\u2019s Relay chain does not have smart contracts, it&#8217;s up to the blockchains plugging into Polkadot to enable smart contracts. For example, one parachain called Moonbeam has full compatibility with Ethereum contracts. Moonbeam\u2019s developers have created a way to interact with digital currencies built on Polkadot via Metamask, the popular web browser wallet for decentralized finance. This means that tokens built on Polkadot\u2019s Substrate, which is a blockchain development tool, can be seamlessly sent to Ethereum wallets and smart contract addresses. <\/p>\n<p>The next layer of the Polkadot ecosystem includes the projects building on top of the blockchains that are built on top of the Relay chain. For example, Ocean Protocol is in the process of deploying their smart contracts onto the Moonbeam blockchain. By building on top of Moonbeam, the OCEAN token will be compatible with both Polkadot and Ethereum blockchain applications. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Rebuilding_Ethereums_Network_on_Polkadot\"><\/span>Rebuilding Ethereum\u2019s Network on Polkadot<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The increased scalability of Polkadot enables many projects to overcome Etheruem\u2019s high transaction fees and low number of transactions per second. Similar to Ethereum\u2019s decentralized data storage projects such as FileCoin, Sia or Storj, Crust Network is building a similar solution on top of Polkadot. Unlike Ethereum-based projects, Crust Network isn\u2019t constrained by Ethereum\u2019s scalability problems. Many of the applications we have come to love on Ethereum are being re-built on the Polkadot network or integrated via chain-agnostic gateways.<\/p>\n<p>The Polkadot ecosystem appears to be brimming with projects ranging from decentralized cloud computing with Phala Network to cross-chain custodial wallets such as the browser based Math Wallet. The hardware-based virtual private network project Deeper Network has already sold over 10,000 physical devices on Indiegogo, Amazon, and BestBuy. Deeper\u2019s blockchain solution coordinates all devices and routing in a privacy-preserving way, holds the device registry (in the form of a public key infrastructure) and manages staking and reputation subsystems. <\/p>\n<p><template data-name=\"subscription_form\" data-type=\"consulting_newsletter\"><\/template><\/p>\n<p>Only time will tell if this nascent blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> can successfully achieve the affordable fees, high transaction throughput, and impenetrable security needed for a fairer future of finance and communication. <\/p>\n<p>The 40+ page report is published by Cointelegraph Research.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/will-polkadot-save-decentralized-finance-from-ethereum-s-scaling-problem\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Will Polkadot save decentralized finance from Ethereum\u2019s scaling problem? &#8221; Web3, interoperability, and layer 0 are all terms tossed around when describing Polkadot. But what do they mean, and how will they impact the Internet and cryptocurrency market? Cointelegraph Research\u2019s new report explores how Polkadot is tackling distributed ledger scalability and centralization of the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":330729,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDgvZWM4NzJkZjYtNDFjNS00MjA1LWE0YjctYjNhYTM3MjU5ZTk2LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,75952,74868,75326,75168,76341,93542,61514],"class_list":["post-330728","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-cointelegraph-consulting","tag-defi","tag-ethereum-2-0","tag-polkadot","tag-scalability","tag-web3","tag-research"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/330728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=330728"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/330728\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/330729"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=330728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=330728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=330728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}