Boxmining

Tag: polkadot

  • Polkadot ($DOT): Everything you need to know about the DeFi darling of China

    Polkadot ($DOT): Everything you need to know about the DeFi darling of China

    Polkadot ($DOT) refers to itself as a next-generation blockchain protocol that connects multiple blockchains into one network. As we’ve seen in a previous article on the hottest blockchain projects in China, Polkadot and its Co-creator Gavin Wood are highly regarded by the Chinese cryptocurrency community, who are heavily invested in this project. Polkadot is also now gaining a lot of interest in the West because of its listing on major exchanges such as Binance, OKEx and Kraken.

    The purpose of Polkadot is to enable blockchain networks to improve scalability, optimise themselves for specific use cases, work and communicate together, self-govern, and upgrade without the need for hard forks. In this article, we look at Polkadot’s current status, its role in Decentralised Finance (DeFi), the $DOT token and more.

    Here’s our video explaining what is Polkadot in less than 2 minutes!

    https://www.youtube.com/watch?v=2FyLxZezPmk&t=2s

    Background

    Polkadot was launched in 2016 and is run by the Web3 Foundation, which strives to build a free and decentralized web. However, the foundation had made a contract with Parity Technologies to build its protocol. Its Founders are Gavin Wood, Peter Czaban, and Robert Habermeier. Gavin Wood, in particular, is also one of the Co-founders of Ethereum, thus bringing a sense of legitimacy and confidence in the eyes of a lot of cryptocurrency enthusiasts, especially from the Chinese audience.

    The team has extensive experience with distributed ledger systems, blockchain protocols (particularly Ethereum), cryptography, and wallet technology. Despite the lead developer being Parity Technologies, multiple independent teams have contributed to the development of Polkadot.

    What Is Polkadot?

    Polkadot is a sharded bridge-like protocol, which focuses on maintaining communication, value transfer, and pooling the security of blockchains. It allows blockchains to operate with each other in a parallel manner by unifying them into one network. The unification compounds the strengths of different blockchains and mitigates their weaknesses.

    According to the team, Polkadot is a project by developers for developers. It is aimed at connecting public and private chains, oracles, DApps, and services to seamlessly work side by side. And thus, it facilitates the connection of different independent blockchains together into a single Web3 Internet.

    Polkadot’s Building Blocks

    Polkadot is built on Substrate blockchain building framework that is derived from Parity’s experience with Ethereum, Bitcoin, and enterprise blockchains. The protocol’s state machine is compiled with WebAssembly (WASM) – a high performance virtual environment.

    Furthermore, Polkadot uses libp2p for peer discovery and communication. It is coded with C++, Rust and Golang for wide developer accessibility.

    Polkadot Governance Model

    Polkadot governance model is on-chain and well defined. It is designed to include all stakeholders in a governance council. The users can participate in the system’s decision-making by simply holding the native $DOT token. Currently, Polkadot’s Council and Technical Committee are in place, so the project and its direction is completely in the hands of $DOT holders. Governance proposals are submitted by the Council, the Technical Committee or $DOT holders. There are then voted on by the $DOT holding public.

    Status of the Polkadot Network

    Polkadot has been increasing the size of its validator sets. Now there are 274 validators operated by around 200 independant operators and backed by over 7,000 individual nominating accounts.

    This year, Polkadot launched Westend, their main long-term valueless testnet. They have also launched 2 versions of Rococo- which are Polkadot’s short-term parachains public testnets.

    Rococo

    Rococo is a public testnet aimed at testing the parachains consensus process, together with parachains built by the community and their interactions with each other.

    Rococo v1 is the latest version released on 22nd December 2020.

    PolkaBrige

    PolkaBrige is a decentralised application (dApp) platform. It also comes with its own decentralised exchange (DEX) known as PolkaBrige DEX which allows users to directly swap tokens on Polkadot to other tokens on other blockchain platforms such as Ethereum, Binance Smart Chain etc.

    To meet the yield farming craze, Polkabrige also has a smart farming mechanism which allows liquidity providers to earn more rewards.

    Advantages of Polkadot

    The Polkadot project is set to revolutionize blockchain technology by offering a bridge-like framework that provides the following advantages:

    1.       Limitless Scalability – Polkadot can support an infinite number of blockchains and allow them to connect together. These are known as para-chains.

    2.       Adaptable Consensus Mechanism – As different blockchains run on different consensus mechanisms, the Polkadot platform provides an open and adaptable consensus mechanism to host them.

    3.       Cross-Chain Transactions – The framework can support the transfer of value between different blockchains. It’s necessary for interoperability and true integration.

    4.       Defined Governance Mechanism – It has a defined governance mechanism, which eliminates a major problem faced by other blockchains.

    5.       Upgradeability – Polkadot can support upgrades, without having to resort to drastic hard forks to implement change.

    6.       Pooled Security – The blockchains connecting with Polkadot can be secured by a unifying security umbrella. This can help protect small chains that don’t have effective security bootstrapping.

    7. Low transaction fees– Polkadot claims it has lower transaction fees compared to Ethereum.

    Polkadot Token ($DOT)

    The Polkadot token, denoted by the ticker symbol $DOT, is the native asset of the Polkadot platform. It serves three main functions: governance, staking, and bonding. It has a total supply of 10 million DOT.

    Governance

    As mentioned before, DOT holders have the right to govern the platform. When we say ‘right’ it doesn’t mean that they are given privileges by someone. But rather, it is embedded in the protocol of Polkadot that DOT holders inherently have governance capabilities. These capabilities include changing the network fees, auctions, as well as the schedule for adding parachains — parallelized chains that execute parallel to Polkadot’s Relay Chain. Furthermore, holders also have influence over upgrades, bug fixes, and other system maintenance.

    Staking

    Decentralized networks require consensus mechanisms to ensure that only valid transactions are confirmed. Polkadot utilizes NPoS (Nominated Proof of Stake) as its algorithm for validation. And, DOT holders have the option to participate in this essential network operation.

    Basically, holders will be rewarded for staking their DOT in the protocol in exchange for risking their holdings for the validation of the network. This also serves as a disincentive for bad actors to participate in the network, as they are likely to lose their stake if they ‘misbehave’.

    The requirement for participating largely depends on the staking duration and the total number of tokens staked.

    However, it has been discovered by the Polkadot Team that some nominators are not receiving their rewards. The Team is currently working on a solution but this will take time. Meanwhile, the Team recommends those staking with less than 200 $DOT who do not have the opportunity to bond more should move to staking on cryptocurrency exchanges. At present, the following exchanges offer staking-as-a-service for Polkadot: Kraken, Huobi, MXC, and KuCoin.

    Bonding

    The last use case for the DOT token is bonding — this is the process of tying up DOT in order to add new parachains. It is an extension of the functionality of proof of stake.

    DOT 100x redenomination

    After the Council and Technical Committee was put into place, there was a community-run poll to determine how many Plancks should be considered as being one DOT token. Plancks are the smallest unit of exchange in Polkadot, this value does not change, rather it was how many Plancks comprise one DOT which was voted upon. It was decided that one DOT will now be denominated by 1e10 plancks instead of 1e12 plancks. So the new version of $DOT will be 100x smaller than the old $DOT.

    This redenomination will occur on 21st August 2020 at around 13:15 (UTC), specifically at block number 1,248,328. When this occurs, users do not have to do anything because it is only a front-end change. Also, most exchanges such as Binance or Kraken will automatically multiply users’ DOT deposits after the redenomination, i.e. if you deposited 10 old $DOT before the redenomination, you will automatically be credited with 1,000 new $DOT after the redenomination. And to protect users in anticipation of this, users will not be able to withdraw new $DOT until after the redenomination.

    Users have to meantime, bear in mind that some exchanges e.g. OKEx, MXC etc. offer trading pairs in OLD $DOT, whereas others e.g. Binance and Kraken offer trading pairs in NEW $DOT. $DOT holders and traders should check with the exchange they are trading on to see what their policies are for $DOT.

    Projects Built On Polkadot

    The Polkadot ecosystem has an enormous outreach and usage. There are currently 188 projects building on it. This includes crypto-projects related to DeFi, cryptocurrency wallets, infrastructure projects, tokens, Oracle, DAO, privacy, exchange, gaming, IoT, scaling, etc.

    A few well-known projects being built on the Polkadot protocol are Chainlink, Ankr, Celer Network, Akropolis, Ocean Protocol, 0x Protocol, imToken, etc.

    Polkadot’s Role in DeFi Projects

    The Decentralized Finance (DeFi) field relies on composability, cross-chain communication, value transfers, and protocols integrating with each other. It’s practically the entire rationale behind the Polkadot project. And as such many, DeFi projects utilize Polkadot.

    For instance, the DeFi automation and aggregation-based Akropolis project relies on integrations with Maker, Compound, Curve and dYdX,. They have collaborated and contributed greatly to the Polkadot ecosystem.

    Polkadot’s Similarities with Upcoming Ethereum 2.0

    The Ethereum 2.0 Phase 0 mainnet is expected to be launched in November 2020. It will introduce the highly anticipated staking mechanism. However, its full deployment won’t be complete until a few years. Polkadot, as it appears, has an incredible similarity with Eth2.

    For instance, both blockchains support sharding, meaning that they execute processing in parallel by allowing individual shards to divide the workload and communicate with each other. They both also implement hybrid consensus models, staking mechanisms, and state-transition functions.

    Conclusion

    Polkadot is fast gaining traction in the DeFi field and the wider crypto community. Owing to the easy integration, available grants, and wide composability, Polkadot’s projects are rapidly gaining value and the Polkadot association appears to have a positive influence on the project’s token price.

    As the ecosystem further matures, it is likely to become an integral part of the blockchain field and smart contracts platform.

    Decentralised Finance (DeFi) series: tutorials, guides and more

    With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. As well as a deep dive into popular DeFi topics such as decentralized exchanges, borrowing-lending platforms and NFT marketplaces

    The DeFi series on this website also covers topics not explored on YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

    Tutorials and guides for the ESSENTIAL DEFI TOOLS:

    More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel so you can be notified as soon as they come out!

    Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.

  • Efinity: The NFT Platform of the future

    Efinity: The NFT Platform of the future

    What is Efinity (EFI)?

    Efinity (EFI) is a next-generation blockchain for digital assets that has been developed by Enjin (ENJ) – An ecosystem that lets the consumer buy, sell, and distribute Non-Fungible Token (NFT) items, which was started in 2009 and has more than 20 million gamers around the world.

    EFI is a parachain for NFT that was built with a consensus algorithm based on Polkadot Relay Chain validators in conjunction with the Web3 Foundation, allowing it to have its economic framework, data, and state. 

    For your better understanding, Polkadot is a blockchain platform that enables a fully decentralized web of parachains in which people fully own their identity and data.

    The Polkadot is outlined to run two kinds of blockchains:

    Relay Chain:

    The heart of Polkadot, accountable for the network’s distributed security, agreement, and cross-chain interoperability.

    Parachains:

    Main blockchains that utilize the transfer chain’s calculating sources to verify that transactions are safe and reliable.

    polkadot relay chain

    Efinity will operate as a parachain using Polkadot Relay Chain validators, allowing it to become a self-governing financial structure, data, and environment. Aside from that, it also is attempting to address blockchain issues such as interoperability, scalability, agility, safety, isolation, and many others. The Efinity’s collator nodes are responsible for processing transactions on the Efinity parachain and the network pays out EFI (its native token) from Collator Pool to them.

    How does Efinity (EFI) function?

    As we have mentioned above, the EFI blockchain will serve as a parachain in the Polkadot ecosystem. As a result of Polkadot’s interconnection technology, Efinity will be one of a hundred blockchains that can communicate with one another, allowing developers of other parachains to incorporate Efinity (EFI) NFT into their ecosystem while knowing that they will also work in different blockchains.

    Efinity has been working on developing a paratoken that will be similar to the ERC-1155 tokens they created for Ethereum. EFI will be the first paratoken in reality. The Efinity blockchain will process approximately 700 transactions per second with a confirmation period of six seconds.

    Efinity will act as a primary platform for all fungible and non-fungible tokens. Tokens from any other chain, such as the prominent ERC-721, ERC-1155 and ERC-20 standards, are accepted by the paratoken standard. This standard is necessary as it will generate network effects by attracting growing numbers of transactions. The network that solves the problem of enabling the pricing and exchange of NFTs will inevitably gain traction. To get a bid, tokens do not need to be advertised for sale or even exist on the network. In reality, users can be rewarded for initiating bid orders or ask orders and increasing network utilization by initiating transactions that other users can complete.

    This method will automatically encourage buyers and sellers to join the network and produce network effects by encouraging users to begin transactions. Third-party apps that allow the users to transfer inside other platforms such as games or that serve as NFT markets are expected to expand on this capability.

    What Makes Efinity (EFI) Special?

    EFI is special because it prioritizes token generation, transfers, and purchases since it aims to serve NFT Highway rather than general-purpose computing blockchain. Hence, the EFI transaction cost is much smaller, which will allow the users to focus on their favourite items without thinking about how the network works.

    Efinity (EFI) Features and Advantages

    According to the EFI official whitepaper, EFI provides the same features that are offered by another handful of NFT marketplaces, such as fast transactions & low fees, fuel tanks and efinity swap.

    1. Fast Transactions & Low Fees

    Based on the EFI whitepaper, EFI can process 700-1,000 transactions per second (the Ethereum network presently processes approximately 15 TPS). When the EFI and Polkadot runtime code is optimized, TPS may be increased in the future. Plus the transactions are verified in under six seconds, allowing for the fast response times required by mainstream applications.

    enifity provides fast transaction & low fees

    Aside from that, a fee payer signature may be included in a transaction before broadcasting, allowing someone else to acknowledge responsibility for fees through a signature. This can be beneficial for businesses and producers who want to reduce transaction costs for their customers.

    1. Fuel Tanks

    Fuel Tanks are special discrete accounts that are used purely for transaction fees. Developers can choose to subsidize expenses for their customers by depositing EFI tokens into a Fuel Tank that they control. They can whitelist specific tokens, tags, transaction types, or individuals for use.

    1. Efinity Swap

    Efinity Swap is an automatic conversion mechanism that improves the efficiency of paratoken exchanges by enabling an automatic conversion of paratokens into another paratokens to fulfil current bids and ask for orders. These swaps are made possible by existing bids and ask orders. The network allows for these automated exchanges for paratokens that meet a minimum number of Bids and Ask orders.

    What is an EFI token?

    As mentioned above, the EFI token is the main utility paratoken on the network, with 2,000,000,000 tokens. 

    For nominator staking and pools, 15% of the entire supply is set aside. These tokens are given out as a reward for helping to manage the parachain over the first 8-10 years.

    On genesis, 3% was allocated to the decentralized treasury pool. 15% of the total EFI supply is set aside to autonomously reward collaborators and pools for significant contributions to the network, such as transaction processing, development of new modules, network maintenance and initiatives to extend the network. This section will be gradually unlocked over the course of several years until the entire token supply is depleted.

    The EFI Token is used for all transaction fee payments on the EFI network in which the type of transaction determines the pricing and distribution of transaction fees. Any orders filled will incur a 2.5% fee will have to divide among four pools. Developers who create NFTs have the option to charge a fee for marketplace orders. This can be set to a maximum of 25% of the total cost. 

    Below is the detail of the EFI Token information:

    1. EFI token metrics
    • Token Name: Efinity.
    • Ticker: EFI.
    • Deployment Network: Efinity.
    • Relay Chain: Polkadot.
    • Token Standard: Paratokens.
    • Contract: 0x656c00e1bcd96f256f224ad9112ff426ef053733
    • Token Type: Utility and Governance.
    • Total Supply: 2,000,000,000 EFI.
    • Circulating Supply: EFI has not launched yet.
    1. EFI Token Allocation
    • Ecosystem: 35%.
    • Staking & Pools: 15%.
    • Company: 20%.
    • Team: 10%.
    • Seed Round: 3%.
    • Early Round: 7%.
    • Strategic Round: 5%.
    • Public Sale: 5%.
    1. EFI Token Sales
    EFI toke sales

    How to buy EFI tokens

    You can buy the EFI token through several ways, which can be through DEX and CEX platforms:

    1. DEX: Uniswap, Sushiswap
    2. CEX: Gate.io, crypto.com, Coinlist Pro, MEXC

    Conclusion

    In summary, EFI could be a good investment since the future related to NFT seems bright. The affiliated relationship between Efinity and Enjin will democratize NFTs using micro-fees. It will be a game-changer for developers and businesses who require better performance on massive operations, making it a good and potential place to be invested.