Polkadot is designed to encourage active participation in Polkadot by holders of DOTs. Active participation in this context involves a holder of DOTs performing one or more of the following roles within Polkadot:
These participants will play a crucial role in adding new blocks to the Relay Chain and, by extension to all parachains, such that parties can complete cross-chain transactions via the Relay Chain. Validators perform two functions. First, verifying the information contained in an assigned set of parachain blocks is valid (such as the identities of the transacting parties and the subject matter of the contract). Their second role is to participate in the consensus mechanism to produce the Relay Chain blocks based on validity statements from other validators. Any instances of non-compliance with the consensus algorithms result in punishment by removal of some or all of the validator’s staked DOTs, thereby discouraging bad actors. Good performance, however, will be rewarded, with validators receiving transaction fees in the form of DOTs in exchange for their activities.
These participants may nominate validators to carry out validation work on their behalf by contributing to the security bond of their nominated validators. It is anticipated that a significant portion of DOTs in existence at any particular point in time is likely to be bonded to validators for the purpose staking. Bonding DOTs to a validator requires nominators to perform due diligence and constant analysis in order to select the validators which are the most likely to behave according to Polkadot’s rules. Nominators receive a pro-rata increase or reduction in their DOT holding according to the growth or depletion of the security bond to which their DOTs were contributed.
These participants will sit atop parachains and provide proofs to validators based on transactions from parachains. Collators maintain parachains by aggregating parachain transactions into parachain blocks and producing state transition proofs for validators based on those blocks. They also monitor the network and prove bad behavior to validators. Collators maintain a “full-node” for a particular parachain; meaning they retain all necessary information to be able to author new blocks and execute transactions in much the same way as miners do on current PoW blockchains. Under normal circumstances, they will collate and execute transactions to create an unsealed block and provide it, together with a zero-knowledge proof, to one or more validators responsible for proposing a parachain block.
These participants are not engaged in the process of validating transactions in the same way as validators or nominators, but rather they deter bad actors by monitoring activity across the platform to determine whether any other participants have acted in breach of the rules. Fisherman will be required to provide significantly fewer DOTs by way of a security bond but can receive proportionately larger DOT rewards (in comparison to rewards received by validators and nominators) in proportion to the size of their security bond.
Parachains are the name given to the parallelized chains that participate in the Polkadot network. There is no specific limit to the number of chains that can be connected to the Polkadot network, which is scalable by design. Initial predictions suggest the basic Polkadot design will be able to handle at least dozens and perhaps hundreds of parachains. There are also paths to more enhanced models. For example, there is no reason why Polkadot cannot be composed in a recursive fashion, making some of the chains that Polkadot connects be themselves “mini Polkadots.” Should this be introduced, it is difficult to imagine an upper limit on the number of chains it could connect and thus the number of transactions it could process
Polkadot is a scalable heterogeneous multi-chain. This means that unlike previous blockchain implementations which have focused on providing a single chain of varying degrees of generality over potential applications, Polkadot itself is designed to provide no inherent application functionality at all. Rather, Polkadot provides the bedrock “relay-chain” upon which a large number of validatable, globally-coherent dynamic data-structures may be hosted side-by-side. We call these data-structures “parallelized” chains or parachains, though there is no specific need for them to be blockchain in nature. In other words, Polkadot may be considered equivalent to a set of independent chains (e.g. the set containing Ethereum, Ethereum Classic, Namecoin, and Bitcoin) except for two very important points:
- Pooled security
- trust-free interchain transactability.
It consists of many parachains with potentially differing characteristics which can make it easier to achieve anonymity or formal verification. Transactions can be spread out across the chains, allowing many more to be processed in the same period of time. Polkadot ensures that each of these blockchains remains secure and that any dealings between them are faithfully executed. Specialized parachains called bridges can be created to link independent chains.
- Relay chain: Coordinates consensus and transaction delivery between chains
- Parachains: Constituent blockchains which gather and process transactions
- Bridges: Link to blockchains with their own consensus such as Ethereum
Rules of Polkadot:
- Minimal: Polkadot should have as little functionality as possible.
- Simple: no additional complexity should be present in the base protocol that can reasonably be offloaded into middleware, placed through a parachain or introduced in a later optimization.
- General: no unnecessary requirement, constraint or limitation should be placed on parachains; Polkadot should be a test bed for consensus system development which can be optimized through making the model into which extensions fit as abstract as possible.
- Robust: Polkadot should provide a fundamentally stable base-layer. In addition to economic soundness, this also means decentralizing to minimize the vectors for high-reward attacks.