Polkadot

Founded by Ethereum co-founder Gavin Wood, Swiss-based Polkadot is the flagship project of the Web 3 Foundation, which aims to build a fully decentralized web. The project uses the native token DOT and offers a protocol that enables data to be shared between public, open, and permissionless blockchains as well as private and permissioned ones to enable users to build apps that can leverage data from multiple chains. Polkadot aims to achieve this level of interoperability by joining a network of heterogeneous blockchains called parachains and parathreads that connect to the “Polkadot Relay Chain,” its central blockchain, which it launched in May 2020. Additionally, these parachains will also be able to connect to external networks through “bridges,” which enable users to achieve a comparatively high level of scalability by creating a general environment for multiple state machines. The use cases of these parachains include DeFi applications, identity verification, supply chain management, NFTs, IoT, and DAOs. 

As of December 2021, the company was in the process of rolling out several of these parachains, which have been tested and optimized both on parachain testnets and on Kusama (a public pre-production environment for Polkadot) through an auction process. In December 2021, Parallel Finance, a DeFI lending and staking protocol, won the fourth parachain slot auction with around 10.75 million DOT (worth USD 285.10 million as of December 2021) in contributions from more than 30,000 supporters. The winners of the previous auctions were Moonbeam, a smart contract-building platform Acala, a liquidity hub for Polkadot, and decentralized app hub Astar. In May 2022, Polkadex, a decentralized exchange, raised over 950,000 DOT from 6,000 contributors (approximately USD 13.8 million at current prices) to win the 16th slot auction and join the Polkadot parachain. 

In June 2022, Polkadot announced a new governance system dubbed “Gov2,” which aims to be more inclusive and decentralized while increasing the number of proposals that can be voted on. The new system removes the Polkadot Council and Technical Committee in favor of a more decentralized governing body. It also includes features that enable many decisions to be made simultaneously. 

Key customers and partnerships

In May 2022, Polkadot leveraged Moonbeam to introduce liquid staking to its network through a partnership with Lido. The integration enables DOT holders to stake their assets in the form of xcDOT (cross-chain DOT), for which they are able to receive stDOT (staked DOT) tokens. In September 2023, the company partnered with Zodia, a digital asset custody solutions provider, to enable the latter’s institutional client base to access the Polkadot ecosystem and stake DOT.

In November 2023, Polkadot partnered with Cardano, a Layer 1 blockchain platform, to jointly develop independent blockchains that are interoperable with Polkadot’s Substrate network.

Funding and financials

In July 2020, Polkadot raised USD 43.3 million in funding through a private token sale of DOT. The sale included participation from several investors who reportedly contributed over 3,900 bitcoins via 1,059 transactions for DOT tokens at USD 125 apiece. Notably, residents of the US, Japan, and a few other countries were disallowed from participating in the sale due to regulatory restrictions.