summary: Polkadot is a network protocol that enables the transfer of arbitrary data, including tokens, across blockchains. 
content: Polkadot is a network protocol that enables the transfer of arbitrary data, including tokens, across blockchains. This allows for the possibility of cross-chain registries and cross-chain computation. It is capable of transferring data between public, open, permissionless, and private, permissioned blockchains. This makes it possible to develop applications that can use permissioned data from a private blockchain on a public blockchain. Polkadot is designed to enable individuals to regain control of their digital information from third parties, allowing for a secure web where data is kept from central authorities and internet monopolies. It provides a foundation for layer-1 blockchains to develop, potentially leading to new business models, services, organizations, societies, and economies. Polkadot intends to further the potential of blockchain technology by providing a way for different blockchains to connect within a scalable ecosystem and facilitating secure cross-chain communication. History The Polkadot whitepaper was published in 2016 by Dr. Gavin Wood, co-founder and former CTO of Ethereum and creator of Solidity. He founded Polkadot alongside Robert Habermeier, a Thiel fellow and member of the Rust community with a background in blockchain, distributed systems, and cryptography, and Peter Czaban, Technology director for Web3 Foundation with a Masters degree in Engineering from the University of Oxford and background in defense, finance, data analytics, machine learning, and business development. !image2-1.jpgPolkadot co-founders (L-R) Robert Habermeier, Dr Gavin Wood and Peter Czaban In 2017, Dr. Wood co-founded the Web3 Foundation for research and development of decentralized web technologies, including Polkadot. Parity Technologies, which has done the majority of development work on Polkadot's core technology as stated in the whitepaper, was co-founded by Dr. Wood and former Ethereum head of security Jutta Steiner. In 2019, the first version of the Polkadot codebase, known as Kusama, was released as an unaudited canary network. Kusama serves as a testing platform for Polkadot's technology and has its own independent economic incentives. The Kusama network is independent and is directed by its own decentralized community. In May 2020, the Polkadot genesis block was launched as a proof-of-authority (PoA) network with a single Sudo (super-user) account controlling governance. Subsequently, validators joined the network and signaled their intent to participate in consensus. In June 2020, the network evolved to become a proof-of-stake (PoS) network. The Sudo module was removed in July 2020, transitioning the chain's governance to the token (DOT) holders and securing the chain with a decentralized community of validators. Overview Polkadot adopted a multi-phase rollout strategy for its mainnet launch. During the first phase, Polkadot operated as a proof-of-authority (PoA) platform, with six validators from the Web3 Foundation managing the network. In June 2020, the second phase of the proof-of-stake implementation was initiated, which enabled DOT owners to claim validator slots and receive staking rewards. The first validator election was held during this phase. In late July 2020, Polkadot's governance system was enabled through Phases 3 and 4, which saw the election of the Council and Technical committees and the acceptance of public proposals. In August 2020, the final phase approved balance transfers of the DOT token. Polkadot uses a technology that allows specialized chains/networks to exchange messages and communicate with other specialized chains/ networks. Polkadot technology comprises four core features: Relay Chains The Relay Chain is the central chain of Polkadot, built using Substrate, Parity’s framework for developing custom blockchains. It forms an integral part of Polkadot, responsible for the network’s shared security, consensus, and cross-chain interoperability. The Relay Chain offers a limited number of transaction types, which include ways to interact with the governance mechanism and participate in consensus. It is designed to be minimal in functionality, with its main purpose being to secure and coordinate the system as a whole. All Polkadot validators are staked on the Relay Chain in the native token (DOT) and verify transactions coming from the connected parachains. Parachains Polkadot parachains are independent layer-1 blockchains that connect to the Relay Chain. Each parachain has its own design, token economy, functionality, and governance. Polkadot's network security is shared by the parachains, which do not need separate validator communities and are able to exchange data as well as tokens between chains. Polkadot was developed to enable blockchains to specialize in different features and use cases, thereby increasing efficiency, security, and service quality. Parathreads Parathreads are parachains that connect to Polkadot using a pay-as-you-go model, allowing blockchains with varying levels of connectivity to the network to access the network at a low cost. Blockchains on Polkadot are able to switch between being parachains and parathreads based on their needs and the availability of parachain slots on the Relay Chain. Bridges Bridges are a special type of parachain that allow chains and apps on Polkadot to connect and communicate with external networks like Ethereum and Bitcoin. There are two types of bridges in the Polkadot ecosystem: Bridge modules Bridge modules allow non-parachains to act as a “virtual parachain” while extending the external or the other chain’s functionality, with the interoperability benefits of Polkadot. Bridge contracts They exist on specific parachains that support smart contracts, linking Polkadot and any other smart contract capable or intelligent contract-enabled blockchain. The DOT Token DOT is the native token of the Polkadot network. It was created after the Web3 Foundation concluded a relatively successful ICO in October 2017 and raised over $140 million by selling 50% of the 10,000,000 DOT token supply. The sale was split between a private sale, which raised over $80 million, and a public sale, which raised the remaining. On Nov. 6, 2017, a vulnerability was exploited in the Parity multi-sig wallet containing over 500,000 ETH, including $98 million of the $140 million+ in ETH raised through the Polkadot ICO. These funds are frozen, and a debate among the Ethereum community will determine whether these funds can or will ever be recovered. Even if the funds are lost, the Parity team does not believe this will impact their development roadmap. Despite this event, Polkadot further conducted two private sales. One in 2019, when the foundation announced it sold 500,000 DOT (old) tokens to an undisclosed group of private investors and successfully raised $60 million. The second private sale was held in the summer of 2020 and raised 3,982.07 bitcoin (BTC) worth an estimated $42.76 million upon completion. DOT tokens, by design, have a 10% inflation rate in the first year, after which validator and nominator staking dynamically determine the inflation. DOT holders will have: The ability to act as a validator, collator, nominator, or fisherman. The ability to participate in the governance of Polkadot. The ability to be a collator for a parathread by making bids for block inclusion that are denominated in DOT. The ability to participate in the decision-making process in relation to global upgrades and/or changes to Polkadot. The DOT token serves 3 distinct purposes: Governance over the network, Staking, and Bonding. Governance Polkadot token holders have complete control over the protocol. All privileges, which on other platforms are exclusive to miners, will be given to the Relay Chain participants (DOT holders), including managing exceptional events such as protocol upgrades and fixes. Staking Polkadot uses Nominated Proof of Stake (NPoS) technology. A decentralized network of validators is selected by nominators to secure Polkadot's multichain ecosystem, and the block rewards are distributed between validators and nominators. DOT can be staked natively on Polkadot, on Non-Custodial Wallets, Liquid Staking/Third-Party Pools, or on Custodial Exchanges. How to stake natively on Polkadot By joining a nomination pool Nomination pools are a feature of the Polkadot staking system that allows users to pool their DOT tokens together on-chain to nominate validators and receive rewards. DOT holders can join a nomination pool with a minimum of 1 DOT and pool members split rewards and penalties proportionally. Nominating directly Nominators select trustworthy validators and earn rewards in return. Nominators can lose a portion of their staked DOT if a chosen validator misbehaves. Opening a nomination pool Confident users can open their own nomination pool and allow others to join and pool their stake. Running a validator Validating is for more technical users who secure the network and produce blocks on the Relay Chain. Validators are rewarded for good behavior and can lose DOT for bad behavior. Bonding New parachains are added by bonding tokens. Outdated or non-useful parachains are removed by removing bonded tokens. This is a form of proof of stake (PoS). DOT is inflationary, which means that, unlike Bitcoin, there is no maximum number of DOT. The rat