Polkadot is a new decentralized platform for building, managing and using blockchain networks. It has recently announced the launch of testnet-1 with an ICO sale scheduled to take place on May 31st at 9am UTC.
The “polkadot dapps list” is a command-line tool that can be used to view the high-quality assets on Polkadot.
Polkadot has shown its strength as a growing public chain ecological cluster. Polkadot has quickly become the most anticipated Ethereum alternative because to its superb multi-chain slice architectural design. Smart-contract systems such as Moonriver (Moonbeam initial network), Acala (Karura), and Shiden (Astar) have been used in the Kusama slot auction. These platforms provide us with a low-Gas experience that has been long overdue.
Although Moonbeam, Acala, Astar, and other smart-contract platform-type projects have achieved compatibility with EVM and potentially draw projects and ecological transplants from Ethereum, this does not address the asset introduction issue directly. A effective public chain system requires a large asset size and diverse asset categories, and the collection of native assets is unquestionably time-consuming. Bringing in high-quality content from outside the platform becomes a rapid way to improve the platform’s experience.
We’ve seen a lot of initiatives that bring in high-quality components from outside the Polkadot community. ChainX and Interlay (which support BTC), Chainsafe, Darwinia, and Snowfork (which support Ethereum assets), Bifrost and Stafi (which support PoS public chains), Staking Equilibrium (which supports DeFi lock-in assets), and Centrifuge (which supports DeFi lock-in assets) (which introduces off-chain assets). Some of these projects have already been awarded Kusama/Polkadot spots, while others are still being bid on. We’ll take a close look at these initiatives.
BTC (Bitcoin Cash)
The blockchain world revolves around Bitcoin (BTC). Due to its unique standing in the blockchain area and the deep concepts incorporated in its design, BTC has attracted a large number of ardent supporters. In terms of market value, liquidity value, and user base, BTC has dominated the crypto ecosystem. BTC now accounts for approximately half of the total market capitalization of the cryptocurrency market. Polkadot ecology is no exception. As a result, new public chains frequently have a strong motivation to use BTC to inject considerable life into their ecology. ChainX and Interlay are the forerunners in this field.
XBTC (XBitcoin) is a cryptocurrency (ChainX)
Asset backed by Bitcoin ChainX introduced XBTC, a Polkadot ecological cross-chain initiative, in May 2018. ChainX has created a Substrate-based Bitcoin sidechain. ChainX used the first-mover network SherpaX to start a bid for a Kusama slot in late August 2021, which is still underway as of writing. Following a successful offer, XBTC will join the Kusama ecosystem through the SherpaX parallel chain.
For the first time, ChainX leverages WASM technology to add BTC light nodes to the chain and offers SPV verification of BTC transactions, allowing for non-trust security in the XBTC minting process.
It is difficult to add light nodes to validate the contract since the BTC chain lacks Turing completeness. Through a majority vote on the chain, many “trusts” will complete the destruction-unlocking procedure in the BTC redemption process. The escrow addresses will be managed by a total of 15 oracles using multiple signatures. To boost security, ChainX will feature two escrow addresses, a cold wallet address, and a hot wallet address, as well as open and public signature records for community monitoring.
ChainX is dissatisfied with the existing trust-based architecture and says that its asset escrow solution will continue to grow, starting with version 1.0, then versions 2.0, 3.0, and 4.0, all of which will move the asset escrow solution closer to decentralization.
- The XCLAIM technique is utilized to allow a distributed escrow solution in version 2.0.
- Version 3.0: Switching from multi-signature to private key partitioning as the account control technique.
- Allow users to possess a unique private key slice of the escrow account with a veto power in version 4.0. By enabling witnesses to be free of over-collateralization, this concept increases asset escrow security.
Interlay
Polkadot suggested an interoperable link with BTC in its white paper from 2016. Interlay was commissioned by Web Foundation in January 2020 to design and construct a BTC-anchored asset on Polkadot based on XCLAIM. As a result, Interlay’s PolkaBTC may have an official Polkadot backdrop. PolkaBTC was later called InterBTC.
Interlay has created a BTC-Parachain based on the Rust programming language and the Substrate framework, which will be utilized as a future parallel connection into the Polkadot ecosystem. Interlay’s pioneer network Kintsugi tapped into the Kusama slot in October 2021 and is now linked to the Kusama network.
The BTC-Parachain now has the capacity to validate BTC on-chain transactions thanks to the deployment of BTC lite nodes. Several independently managed BTC accounts are responsible for housing locked BTC, known as Vaults, in the InterBTC system, and Witnesses are known as Vault Administrators. By committing DOT in an amount equivalent to the maximum amount of BTC that may be retained in custody, any organization can become a Vault Manager. When a user sends BTC to a Vault, the BTC-Parachain confirms the transaction and gives the user InterBTC. The BTC-Parachian destroys the InterBTC when the user has to redeem the BTC, and the Vault Administrator returns the BTC to the user. The 150 percent over-collateralization protects these Vault administrators against mischief, despite the fact that each Vault is an independently owned account.
The cost will be provided to the Vault’s administrator as an incentive if users pay DOT for casting and redemption. If a Vault Manager tries to take BTC from escrow, the promised DOT will be seized and the person who lost it will be refunded. The presence of the over-collateralization mechanism necessitates the use of a prophesy machine feed in the system. The supplier of the prophesy machine has yet to be decided since InterBTC is not yet operational.
The administrator of the Vault is in charge of the escrow account as well as the Relayer function, which transfers blockheads from the BTC chain to the BTC-Parachain.
Substantial liquidity providers that need to convert large quantities of BTC into InterBTC may utilize the InterBTC system to house their own BTC by constructing their own Vault.
Ren Protocol has created an Acala version of RenBTC in addition to Interlay and ChainX. RenBTC will be one of the BTC-anchored assets flowing in the Polkadot ecosystem, thanks to Acala as the vehicle.
Ethereum assets are being introduced.
If Bitcoin is the most popular digital currency, Ethereum is the most popular smart-contract platform. For blockchain developers, the Solidity language and EVM environment have become the most used development tools. As a consequence, Ethereum has a large number of assets, with up to XXX asset kinds and XXX asset value of all crypto assets. As a result, constructing a cross-chain bridge to Ethereum and allowing Ethereum assets to flow into the PoC ecosystem would surely add a diverse asset type to the ecosystem. ChainBridge, Darwinia, and Snowfork are three typical Polkadot-EVM cross-chain bridge projects.
ChainBridge is a kind of bridge that connects two (ChainSafe)
In late 2020, Chainsafe, a Canadian technology firm and a worldwide leader in Web3 blockchain protocol and infrastructure development, got financing from the Ether Foundation to take over the Web3JS codebase, which was previously maintained by the Ether Foundation.
ChainBridge is a Chainsafe-developed modular two-way cross-chain bridge. Asset distribution from the EVM chain to the SubStrate chain is made possible via ChainBridge. Moonbeam stated in early 2021 that it will incorporate ChainBridge to provide access to Ethernet assets.
Following that, the ChainBridge model’s overall procedure for data and value transfer from Chain A to Chain B.
Step 1: Through Chain A’s bridge contract, the user locks the source chain asset, provides the appropriate information, such as the destination chain ID, and begins a cross-chain request.
Step 2: Relayer will listen for the source chain’s cross-chain request and send it to the destination chain. As well as starting a “proposal” for the cross-chain request.
Step 3: The Relayer team will vote on the proposal, and if the vote exceeds a certain threshold, the bid will go into effect, and Relayer will generate mapped assets for the target chain user.
ChainBridge’s cross-chain security is provided through a multi-signature federation of Relayers, which has the virtue of allowing for faster cross-chain execution but the problem of requiring an assumption of trust multi-signature federation that is not sufficiently decentralized.
Moonbeam’s precursor network Moonriver has acquired the first Kusama slot and is bidding for the first Polkadot slots as of this writing, while Moonbeam’s ChainBridge integration has passed testing and is ready to go live. During the testing phase, ChainBridge successfully linked to the Moonbase Alpha test network and the Ethereum Rinkeby test network.
Snowfork/Darwinia
The process of locking the source assets in the source chain and issuing the mapped assets in the destination chain is known as cross-chain asset transfer. The most challenging part of this procedure is delivering the message. The source asset has been successfully locked in a trustworthy manner in the source chain to the target chain. This duty is performed by a group of multi-signatory signers in ChainBridge, which, as previously noted, has trust assumptions. We, on the other hand, seek a decentralized, trust-free system.
Both sides of the cross-chain must install each other’s light node contracts as part of the decentralized system, enabling the two chains to develop a mutual side-chain connection and verify each other’s transactions. However, we must also overcome another stumbling block. To have verification capabilities, the light node contract must continually store and update the blockhead of the other chain. Still, there will be a difficulty with volume increase and gas consumption in this procedure. On the Substrate side, the Gas usage for building Ethereum’s light nodes is still below acceptable norms. Nonetheless, the Ethereum Gas cost is prohibitively expensive, making Substrate’s light clients uneconomical to deploy. As a result, Substrate performed a critical update by incorporating the Beefly module, which allows the MMR root to be included as a necessary parameter for the block header of the Substrate chain. With this option, the Ethereum Substrate lite client can only save the most recent block headers and remove the older ones, keeping the blockchain light.
Understanding the underlying concepts requires some familiarity with the MMR root and ultra-light nodes. Those who are interested may read more about the research, which will not be covered in this post.
Snowfork and Darwinia are two projects actively working on decentralized technological solutions to link Ethereum with Polkadot. Snowfork will purportedly operate as a public interest parallel chain of polka ecology, while Darwinia mainnet and its pioneer network Crab are contending for the Polkadot and Kusama slots, respectively. Darwinia now enables the exchange of its native pass-through RING between Darwinia and Ethereum, and will later open up a whitelist system to allow tokens from Ethereum to be progressively transferred to Darwinia across chains. For the time being, Snowfork has kept its development a secret.
We discovered that projects are attempting to link to EVM public chains other than Boka and Ethereum. Wanchain has built a bridge between Moonriver and Avalanche, and Anyswap has facilitated asset transfer from Moonriver to BSC and Polygon.
Staking Assets are a new kind of asset that has been introduced to the market.
Most growing public chains have used a PoS consensus process to save energy, and Staking is the primary technique for PoS public chains to protect their networks. The staking rate in a healthy PoS network will typically be around 50%. As a result, staking assets in the crypto realm account for a significant portion, particularly after the announcement of the ETH 2.0 commitment. A significant quantity of ETH has become a Staking asset, with almost 9 million ETH included in the ETH 2.0 commitment at the time of writing (as of block height 13777179 ). Bifrost and Stafi are the two primary Polkadot ecosystem projects that have committed to adopting Staking assets, and both have opted to integrate Staking ETH first.
Bifrost
Staking assets from several public chains are included in Bifrost, which is an underlying DeFi project focused on releasing the liquidity of locked assets.
Pledges for the ETH 2.0 chain were launched on December 1, 2020. Bifrost then released the vETH minting module, which allows users to participate in ETH 2.0 beacon chain commitments over the Bifrost channel and get the liquidity derivative vETH. Bifrost’s pledge (staking) derivative for ETH 2.0, vETH, is the first derivative in the Bifrost vToken series to be issued. A total of 932 individuals mined 17,788 vETH after two rounds of vETH Mint Drop. At the time, vETH was still an ERC20 asset. On December 1, 2021, vETH became live on AnySwap, allowing for the cross-chain transfer of vETH from Ether to Moonriver, making Bifrost the first to join the Polka ecosystem’s Staking derivatives.
Bifrost successfully tapped into Kusama’s 5th slot on July 19, 2021, at 16:17, and formed a parallel chain to Kusama. Bifrost did not decided to deploy vETH directly on the Bifrost mainnet due to the unstable version of XCM and numerous revisions. Bifrost will issue vETH directly on the mainnet when XCM develops, and vETH will circulate on additional parallel chains using XCM.
More Staking derivatives for EVM public chains are being developed by Bifrost in collaboration with Snowfork. Bifrost will also produce SubStrate generic Staking variants for Moonbeam, Kilt, Phala, and other Moonbeam, Kilt, Phala, and other Moonbeam, Kilt, Phala, and other Moonbeam, Kilt, Phala, and other Moonbeam, Kilt, Bifrost will also build SubStrate common Staking derivatives using XCM and SubStrate Common Bridge to enable unlocked Staking liquidity for Moonbeam, Kilt, Phala, and other parallel chains, as well as non-parallel Substrate networks.
In truth, Bifrost may not need to bid on parallel chains at this time in order to land its Slot Auction derivative, vsToken; Bifrost is bidding on parallel chains more to land its Slot Auction derivative, vsToken. Bifrost has already coined XX vsKSM and XX vsDOT, giving the company a complete sweep in the Slot Auction derivatives circuit.
StaFi
StaFi is the creator of the well-known node service provider Wetez as well as a node operator. StaFi understands how difficult it is for stakers to get access to staking assets. As a result, the notion of developing a staking derivative has been in the works for quite some time.
StaFi established the promise derivative rETH after opening ETH beacons with pledges. For ETH 2.0 staking over StaFi’s channel, rETH will be given. As of this writing, 16,685 rETH have been created. rBNB/rSOL, as well as a variety of other Staking derivatives
From a technical standpoint, StaFi creates derivatives using a multi-staking escrow, which contains an assumption of faith in the multi-staking escrow holder. This is, however, the quickest option to adopt cross-chain bridge technology until it develops.
The StaFi chain was built using Substrate, but no plans for slot bidding have been published. The major goal of the StaFi team is to create additional Staking variants of the public chain, according to them. It will make a bid for the Kusama/Polkadot slot when the time comes, bringing numerous Staking derivatives into the Polkadot ecosystem.
Acala had also intended to produce a product called Homa, which would also generate Staking variants on Polkadot, in addition to the two mentioned above. This product, however, is not Acala’s primary business, and no fresh information has been released as of yet.
DeFi Locked Assets: Equilibrium is an introduction to DeFi Locked Assets.
Equilibrium seeks to execute direct cross-chain DeFi, integrating DeFi-locked assets from Ethereum or other public chains straight onto the Equilibrium parallel chain, and then introducing the PoC ecosystem.
Equilibrium will enable Ethereum-based collateral, lending stable currencies directly on Equilibrium, and other assets such as pledging ETH and lending DOT. Equilibrium will also enable Ethereum deposits and Ethereum closing interest redemption. Equilibrium will also include a built-in cross-chain DEX that will allow for direct exchange of Ethereum and PoC assets, as well as complicated cross-chain margin transactions in the future. Equilibrium’s cross-chain will be built on top of existing cross-chain bridges, and projects like Chainsafe and Snowfork will serve as the infrastructure for Equilibrium.
Of course, the Substrate-Ethereum cross-chain bridge and Equilibrium’s cross-chain DeFi platform are bidirectional, allowing for the import of external assets as well as the outward flow of Polkadot assets, which benefits the greater blockchain ecosystem. We are still unsure about the SubStrate chain’s improved performance and the Polkadot ecosystem’s growth. However, we are confident in the SubStrate chain’s strong performance and the Polkadot ecosystem’s rapid expansion.
Equilibrium’s first network, Genshiro, is competing for the Kusama slot at the time of writing, and Equilibrium is giving a highly competitive incentive to win the Kusama position.
Centrifuge is a new off-chain item.
Centrifuge is a technology that allows real-world underlying note assets to be imported into the blockchain and into DeFi. On October 13, 2021, at 3:53 p.m., Centrifuge’s first network, Altair, received the 11th spot in Kusama, establishing a parallel chain.
The founders of Centrifuge think that there are holes in established banking systems that fail to meet customer demand. Consider the $2.1-2.6 trillion credit gap that small and medium-sized businesses face throughout the world, or the roughly $30 trillion in unpaid invoices that are stuck in supply chain systems that can’t move worldwide. The latter is the market Centrifuge wishes to reinvigorate.
The Centrifuge system consists of two primary steps: first, actual assets are turned into a non-homogenized standard token format, NFT, using the Centrifuge platform, so that the underlying instruments representing the real assets may gain some representation of value.
In a second phase, using the application Tinlake on Centrifuge, the option of getting liquidity funds based on NFT collateral may be accomplished by lending stablecoins by overcollateralization of different NFT assets.
Tinlake is a Centrifuge DApp that lets you borrow “money” against future income streams, such as unpaid notes or unrecorded copyright earnings on Spotify, by leveraging NFT as a vehicle to lend stablecoin or other backed assets.
Despite the fact that the process of mapping assets from off-chain to on-chain is still centralized and involves trust assumptions, Centrifuge has taken the first step in bringing off-chain assets on-chain by starting with relatively stable supply chain finance notes, which deserves our continued attention. Off-chain asset on-chain is a difficult undertaking, and if a model breakthrough occurs, the sector will undergo significant changes.
Summary
Each of the aforementioned initiatives, by putting up effort in their direction, acts as a tentacle for the Polkadot ecosystem, getting a variety of high-quality goods.
The two projects linked to the BTC chain, the Interlay main network and its initial network Kingtsugi, are still down.
Projects to link Ethernet chains are taking longer, Chainsafe’s connection to Moonriver has recently finished testing, while Snowfork and Darwinia are also opening up slowly. However, the barrier of building decentralized cross-chain bridges has been overcome, and it is expected that Ethereum assets will soon be able to flow freely into the Polkadot ecosystem.
Projects with staking derivatives are quickly evolving. Stafi has contributed 16,685 rETH to the mint and different rAssets, while Bifrost has become a mint, providing 17,788 vETH. However, due to the immature XCM, Bifrost has already brought vETH into Moonriver through liquidity advance agreements such as Anyswap, whilst StaFi has chosen to concentrate on developing new forms of Staking derivatives first, rather than shooting slots for the time being. Staking derivatives will be heavily incorporated into Polkadot DeFi in the future as XCM develops.
Equilibrium’s ambition to immediately generate cross-chain DeFi and Centrifuge’s desire to import off-chain assets are both considered to be daring, if not outright extreme, endeavors. Although the goods are not yet online and available for use, they have piqued our interest.
We are pleased to see these initiatives and anticipate that additional high-quality assets will be added to Polkadot in the future to energise, speed its launch, and benefit all Polkadot ecosystem builders and believers.
Posted in: Analysis, Polkadot, Polkadot, Polkadot, Polkadot
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Polkadot is a new blockchain that promises to be scalable, interoperable and scalable. The “defi coins on polkadot” are the tokens of Polkadot.
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