Polkadot and Kusama
StakerDAO (SDT), another structured investment PowerPool competitor, is launching a very interesting Polkadot ‘index’ called PINT, a fully collateralized, on-chain vehicle staking in the top projects in the Polkadot ecosystem, governed by its own DAO, or Council, composed of industry professionals. It may not be too early for PowerPool to consider offering a way for the typical NHW investor to get exposure to the Polkadot ecosystem via PINT, combined with other holdings. This would enable PowerPool to claim a ‘multi-chain’ family of investment vehicles sooner, rather than later.
Polkadot is an open-source blockchain technology. The blockchain consists of a Relay chain and a network of Parachains. Parachains are pegged to the Relay chain and are responsible for sending the hash of every block to the Relay chain. Imagine this similar to a screenshot of the current state of the Parachain. Receiving state updates from the Parachains allows the Relay chain to foster value transfer between Parachains. Note that messages can be broadcasted instantly between Prachains and do not require finality.
Polkadot’s finality mechanism is called GRANDPA, which utilizes Proof of Stake. GRANDPA reaches agreements on chains. It is not responsible for validating transactions on a per-block basis. To reach consensus on individual blocks, Polkadot implements a consensus mechanism, called BABE. BABE is responsible for assigning validator slots to nodes with the highest stake.
To enhance interoperability between blockchains, Polkadot utilizes bridges that link the Relay chain to the external blockchain. Since Ethereum cannot become a Relay chain on the Polkadot network, it is planned to connect both chains via a bridge.
Polkadot uses erasure coding to reconstruct information on individual Parachains. This is necessary to prove to other Parachains that information on a particular Parachain is available. The information of a block are held between various validators. If a block is unavailable, it can be reconstructed by a subsection of the original. Ethereum and NEAR Protocol utilise a similar concept.