Polkadot: The New Future of DeFi

Major Signals

• Although it was launched very recently in the middle of last year, it has already gotten to the list of the top five cryptocurrencies by market cap.
• Its market capitalization currently stands at over $15 billion, and it ranks number #4 on the market cap index.
• More than 300 projects are now building on Polkadot’s platform.

Polkadot is a decentralized finance (DeFi) blockchain platform. Its mainnet was launched in May 2020. It is an open-source sharing multi-chain protocol that promotes the cross-chain transfer of not only tokens but any data or asset types, thereby making a wide range of blockchains interoperable with each other.

Ethereum used to be the favorite for building blockchains. But due to the many DeFi applications built on the Ethereum blockchain, issues like transaction speed and high fees cropped up.

Over 300 projects are now building on Polkadot’s platform, leveraging its unique properties to create DeFi solutions previously only available on Ethereum.

Some of the projects include Seascape, a game platform that makes it easy for developers to launch their blockchain-powered games. Also, Acala, a stablecoin, and Clover.
Some of the unique properties include:

• Substrate: A new simple-to-build blockchain framework. It uses a combination of the relay chain (Polkadot’s main chain), parachains, and bridges to connect the blockchain ecosystem into a cohesive, interoperable unit.
• Interoperability: Polkadot is the first interoperable DeFi ecosystem. The applications built on Polkadot and its parachains can easily interact with other blockchains (including Ethereum).
• Fast: It can currently handle more than 1,000 transactions per second (tps), which is more than 10x faster than ethereum in its normal condition. According to its founder, Gavin Woods, it can reach as high as 1 million tps. It has a block time of just six seconds. Most of its transactions are considered final after less than a minute.

Looking at all these factors, it's clear that Polkadot is going to play a crucial time in the future of the DeFi industry.