Category: Relay Chain

Polkadot and Ethereum 2.0 — A Look at the Solutions Building the Scalability of Tomorrow

Polkadot and Ethereum 2.0 — A Look at the Solutions Building the Scalability of Tomorrow

Both Ethereum 2.0 and Polkadot are promising sharding-based protocols overcoming the scalability challenges facing legacy blockchains. Although slightly different, together, the Relay Chain and Beacon Chain represent another significant leap forward, especially for interoperability.
Partitioning the Problem: Sharing the Load via Sharding
Scalability has been a hotly debated topic after networks bumped up against the limits over the last year. Yet, long before it entered the mainstream conversation, developers postulated several angles of attack. Despite the triumphant launch of layer 2 approaches in 2021, layer 1 sharding solutions have long been in the pipeline.
When it comes to partitioned blockchain protocols, Polkadot and Ethereum 2.0 represent the most prominent names pursuing this scalability avenue. These partitions, or shards, are a means of executing transactions in separate shards along with a protocol to send messages between shards. Through sharding, both networks deliver an excellent solution to significantly increase network performance and capacity without increasing node hardware requirements or reducing the degree of decentralization.
We can’t deny the fact that at the core technical level, Polkadot draws many references from Ethereum. However, when it comes to technology, especially how Polkadot and Ethereum 2.0 are applying the concept of sharding, there are several significant differences that developers and users should consider.
For starters, all of the shards in Ethereum 2.0 have the same state transition function (STF), which provides an interface for smart contract execution. As such, contracts on a single shard can share asynchronous messages with other shards. The base layer (main chain) of Ethereum 2.0, referred to as the Beacon Chain, enables the execution of smart contracts and transactions via the eWasm (Ethereum Wasm) interface. By design, Ethereum 2.0 will support 64 shards, wherein each shard will represent a blockchain and transactions executing on that blockchain.
Polkadot uses a different variation of sharding. The network has a main chain called the Relay Chain. Shards on the Polkadot network are called parachains, which can also execute parallel transactions, and are associated with the Relay Chain. Unlike Ethereum 2.0, which currently supports 64 shards, Polkadot currently supports 100 parachains (shards), and each of these parachains doesn’t rely on a single interface like ETH 2.0’s eWasm. Instead, each parachain can individually connect to the Relay Chain, giving developers on these parachains the flexibility to determine their own rules regarding how it changes state.
Simply put, think of Ethereum 2.0’s Beacon Chain as a USB port and shards as USB cables. Only those shards that have the right shape of a USB cable can connect to the USB port. On the other hand, Polkadot’s Relay Chain serves as a universal socket, meaning all parathreads can seamlessly connect to it.
Other than this, the governance process for Ethereum 2.0 is proposed to follow an off-chain model, which will require a hard fork. But Polkadot’s governance model is on-chain and enacted autonomously, giving it the ability to upgrade more seamlessly. Finally, the underlying validator selection mechanism for both also differs given that Polkadot offers strong availability and validity guarantees with a smaller number of validators per shard.

A Glimpse Into the Future Based on the Present
Development and implementation of Ethereum 2.0, also called Serenity, is currently in progress. At present, the Beacon Chain is live, bringing staking to Ethereum and laying the groundwork for future upgrades. However, the merger of Mainnet Ethereum with the Beacon Chain and the addition of Shard Chains will be gradually rolled out in phases. Forecasts are anticipating a 2022 launch, although large recent purchases of Ethereum mining equipment mean certain stakeholders aren’t convinced that timely release is around the corner.
Meanwhile, as a next-generation blockchain project, Polkadot has garnered much attention since 2020. The platform, frequently dubbed the Ethereum Killer despite the tired nature of that overused trope, has established itself as a potential alternative that solves the scalability challenges of Ethereum.
Polkadot’s testnet Kusama is already up and running on a similar sharding model to great success, following multiple crowdloans and millions of transactions processed, with several promising projects bidding for the limited parachain slots. Now, Polkadot parachain slot auctions are arriving in November as the project enters the fifth and final phase of its launch process, beating Ethereum to the sharding punch.
While the sharding competition won’t necessarily result in a winner-take-all outcome, Polkadot is at least a couple of years ahead of Ethereum 2.0. Still, Ethereum’s vast ecosystem shouldn’t be discounted despite the interoperability aspirations of many eager projects bidding on Polkadot’s parachain slots. However, instead of viewing the two chains in competition for higher TVLs or more dapps, it’s better to frame the relationship within the context of added utility for the greater cryptocurrency ecosystem.
It will be intriguing to see how both platforms interact once all Ethereum Improvement Proposals (EIPs) for Ethereum 2.0 have been implemented and Polkadot parachains are connected to the Relay Chain. Assuming everything goes according to plan, the networks can complement each other to deliver an interoperable foundation for next-generation decentralized apps (dapps) and decentralized finance (defi) protocols, supporting higher throughput, lower costs, and the scalability to support expanded blockchain use.
Which will reign supreme — Polkadot or Ethereum? Let us know what you think in the comments section below.

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Polkadot eyes breakout to $75 after DOT price rally sets up classic bullish reversal

Polkadot eyes breakout to $75 after DOT price rally sets up classic bullish reversal

Polkadot (DOT) chart technicals suggest it may rally to a new record high near $75 if DOT can manage to close above its $41-$43 range decisively.That’s according to a classic bullish reversal setup known as an Inverse Head and Shoulders (H&S) that forms when the price undergoes three selloffs during a period of market consolidation. Specifically, the pattern contains an initial selloff, followed by a short-term price rally and another—deeper—selloff. That leads to one more small correction to the upside, followed by another selloff that bottoms out near/at the lowest level of the first selloff.Inverse Head and Shoulders pattern illustration. Source: ThinkMarketsThe first and last selloffs represent “left” and “right” shoulders, respectively, while the second selloff represents the “head.” On the other hand, the level around which all the short-lived rallies top out represents the “neckline” of the head and shoulders pattern.Traditional analysts typically calculate the H&S upside target from the neckline resistance by measuring the maximum distance between it and the head formation.So it appears, Polkadot has been forming a similar bullish pattern on its weekly chart, as shown below.DOT/USD weekly price chart featuring inverse head and shoulders setup. Source: TradingView.comThe maximum distance between DOT’s neckline and the head’s bottom comes out to be nearly $31. Therefore, a successful bullish breakout above the neckline range of $41-$43 puts the next long-term target at approximately $75.Parachain Auctions coming in NovemberThe inverse H&S pattern emerged as DOT rallied by almost 30% this past week to reach a five-month high at around $44. At the core of its weekly uptrend was a price boom across the crypto market, as well as the news of Polkadot’s first Parachain Auctions going live on Nov 11.In detail, Polkadot’s Parachains are parallelized, application-specific chains — child ledgers tethered to a single parent ledger called Relay Chain. Due to their parallel nature, Parachains tend to process multiple transactions simultaneously and maintain and record their data on the main ledger by communicating with other chains.Related: Polkadot to debut parachain auctions after governance voteThat comes as a break from the method of queuing transactions and processing them sequentially.5 years after the vision of a heterogeneous multichain framework was first outlined in the Polkadot Whitepaper, parachains are now ready to launch on Polkadot. Motion 118, to schedule the first auctions, has passed council & now gone to public referendum.https://t.co/8pt3aT4vO3— Polkadot (@Polkadot) October 13, 2021DOT, which serves as a utility token for fees, governance, interoperability, and bonding inside the Polkadot ecosystem, rallied by more than 24% after the Parachain announcement.Next, Polkadot aims to introduce a cross-chain feature that would enable its relay chain to external blockchains (Bitcoin, Ethereum, etc.) via specialized smart contracts. Meanwhile, the project also plans to launch “in-built bridging modules” that would enhance the interoperability of external blockchains with Polkadot. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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