Recently, Chaincatcher invited Fuyao Jiang, the founder of Polkadot ecological project Acala and founder of Polkawallet, Polkawallet's first mobile wallet, as a guest at the Catcher Academy community, and held an AMA with the theme of "Exploring Polkadot Ecological New Opportunities".
Acala is a quasi-parallel chain of Polkadot, providing the underlying financial infrastructure of DeFi, including 3 basic protocols: decentralized stablecoin, decentralized AMM transaction, and decentralized pledge liquidity protocol, allowing DeFi on Polkadot Can prosper and develop.
During the sharing period, Fuyao shared his early stories with Polkadot to community users, as well as his views on Polkadot's parachain auctions, community governance mechanisms and other issues. The full text is now compiled as follows, hoping to inspire readers.
Finishing/Loners Liu
01
The meaning and problems of the Polkadot Parachain
Chain Catcher: As one of the earliest developers of Polkadot, how did you first contact Polkadot and decide to join it?
Fuyao: The first time I deeply liked the Polkadot community was in December 2017. There was a very interesting event on the official Twitter, soliciting global community members to translate Polkadot's Wikipedia. I was the first person in the world to translate into Chinese. , And then the official sent a T-shirt across half of the world, and I tweeted Aite me, especially the feeling of community, this feeling is very good.
Later, I often participated in the early Riot community discussions. Gavin would answer various questions in Riot. The answer is often like writing a paper. It is very long and detailed, and not only at the level of the question, but the knowledge derived from it. Points will also be involved, which is very helpful for understanding.
In the early development of Polkawallet, because this is the first Polka mobile wallet, js api is integrated in RN for the first time, there are many unprecedented pits to step on, I used to communicate with Parity’s Jaco in the early days. This is a god , Maintaining multiple Polkadot js projects at the same time, like a clone, while writing and submitting code, you can also help you solve problems together.
Chain Catcher: Can you talk more specifically about what a parachain is? What does it mean for Polkadot ecology?
Fuyao: As the core concept of the Polkadot network, the parachain relies on the Polkadot relay chain to provide security and communicate with other relay chains. Parachain is based on Substrate, and can exchange messages/assets between parachains, sharing the security of the Polkadot relay chain, and governance, block production, and token economy are all customizable.
For a more popular example, you can think of a parachain as a single state in the United States. Each state can formulate state laws according to local conditions, share military power (shared security on the chain), and can move and trade freely between states. Over time, each state (parachain) can focus on different functions while facilitating effective transactions, forming a strong economy and ecosystem.
Compared with smart contracts, parachains can flexibly customize the blockchain according to their own needs; governance is relatively flexible and can provide more forms of governance to enable participants to obtain incentives; can freely define the technical details of the entire stack, such as the protocol can be upgraded, Including smart contracts, governance and consensus, mutual exchange of assets and information between parachains, sharing of security provided by Polkadot relay chains, and the ability to save the cost of high-capacity/value applications.
With the continuous development of Polkadot in the future, more and more projects will plan to participate in the bidding of Polkadot's parachain slots and initiate the first parachain issuance. At that time, users who hold DOT/KSM can lock their own DOT/KSM to help the project put the bidding slot. Although it seems that it has paid the opportunity cost of staking income during this period, the project party will give users the native token of their own network as an incentive .
Chain catcher: Interoperability between parachains requires access to the Polkadot relay chain, and a large number of DOT token rental slots need to be pledged . Does it mean that projects that need to enter the Polkadot ecology require greater capital costs? Is there a better solution to the short-term security problem of slot renewal failure?
Fuyao: From the perspective of economic cost, although there is a certain cost to become a parachain , it is much lower than the operation and maintenance cost of a single chain. At present, the cost of providing security for mainstream chains can reach tens of millions of dollars each year, among which Ethereum and Bitcoin are even as high as billions of dollars. The cost of obtaining the same security on Polkadot is 3 to 5 orders of magnitude lower than other chains. , And it can also carry out revolutionary fast, unlimited, trustless cross-chain message transmission.
According to the preliminary modeling estimates of the Web3 Foundation, the opportunity cost of renting a parachain is estimated to be 100,000 to 200,000 US dollars a year. The monthly transaction volume of Ethereum Chainlink and MakerDAO is between 30,000 and 200,000, and it costs US$18,000 to 60,000 per month to pay gas fees. These costs are borne by users themselves on demand, and these are small and small on parachains. Fixed value.
Parathreads (Parathreads) is designed to solve the existing Parachain slot bidding potential risk problem and launched a new access to the relay chain mode, it is a new access to the relay chain Service packages, the charging method is similar to the early mechanism of Mobike or ofo, pay a deposit of 100 yuan, and then charge according to usage. If the user does not want to use it, the deposit can be refunded.
Parallel threads and parallel chains are fully interoperable, and you can switch between them. When the slot expires, a parallel thread can be directly rented with a small amount of funds, and it can be easily switched over, so that the short-term security problem of failure to renew can be smoothly solved.
02
Opportunities and future of Polkadot
Chain catcher: On Polkadot, you must bid through the parachain slot and formally become a parachain of it to become a part of its ecology, so can you judge whether a project is a high-quality project from the possibility of successfully running for a parachain ?
Fuyao: I think that projects that are not successful in running for parachains must be high-quality projects. The main reason is that "bad money drives out good money". Inferior parachains will drive high-quality parachains to "homelessness", but they face these problems There are mitigation plans.
Imagine if there is a giant whale with a lot of DOT in his hands, but he has made a garbage project. In order to make money, he shows the magnificence of his project to the leeks by occupying the slot, and then he can pull the plate and harvest the leeks.
If there is a "success" case, more such cases will emerge. Because there is money to be made and profit-driven, this scene should feel familiar in the currency circle. Once there are multiple junk projects competing for parachain slots with huge amounts of money, problems will arise. Really good projects may not have a key advantage in this ugly competition, and may even be looked down upon.
In addition, there are some projects
It is possible for the empty glove white wolf to obtain the slot. They use the slot as a news page to raise the price and harvest a few waves of leeks, which can earn the cost of the slot auction. The empty glove white wolf is quite cost-effective.
In other cases, the institution spends a lot of money to directly take the slot, and then uses it as a bargaining chip to request a low-cost investment quota from the project party. Parachains that can give low-price quotas are more likely to trade the slots, but the parachains may often be for the purpose of cutting leeks. Therefore, in the future, this kind of mechanism gameplay needs to be vigilant and analyzed.
These problems can be greatly alleviated with parallel threads and Kusama parallel slots. However, the appearance of individual malicious competition is not completely ruled out.
Chain catcher: The Ethereum DeFi ecosystem is ushering in an explosion under the liquid mining mechanism. So what do you think is Polkadot's plan for the DeFi ecosystem after the cross-chain problem has been solved through heterogeneous sharding technology? Where do you think its flashpoint will be?
Fuyao: At present, the entire decentralized financial market has exceeded 150,000 users. Although the market size is small, it is still in its infancy, and the number of users has been expanding exponentially. According to statistics, the current average daily growth rate is 0.56%, because all decentralized financial products can bring a huge increase in the number of users after each update and iteration. It is expected that in the next two years, it will exceed 10 million users.
At present, the basic service of the products of the decentralized financial market is the Ethereum network, which is isolated from the Bitcoin network. Although many users are currently earning a lot of real money in Ethereum's DeFi ecosystem, due to the limitations of the underlying network, the current development of Ethereum's DeFi seems to have reached a certain bottleneck.
The products brought by the Acala network under the Polkadot framework have a huge improvement in product performance TPS and richer development of financial derivatives. It can also integrate assets of different blockchain networks through cross-chain, and serve Users of all blockchain networks in the world.
I think synthetic assets and sustainable governance models will be one of the mainstream trends in the future, and what enables liquidity to reflect the ultimate value is to bring actual value to users. The value here is not limited to market performance, and can be passed through. Centralized financial agreements bring new investment exposure to users.
At present, the value capture generated by the DeFi project in the Ethereum ecosystem will also bring the opportunity to capture value in the Polkadot ecosystem, and this gold rush opportunity is just beginning for everyone.
Chain catcher: On-chain governance of any blockchain network is very important. What is Polkadot’s on-chain governance mechanism? What measures does Polkadot have to improve the governance participation of ordinary users?
Fuyao: Polkadot's Substrate Governance is a master of on-chain governance solutions.
Substrate runs most of the on-chain logic in Runtime. When upgrading, all Runtime module modifications can be written into the transaction, and a referendum is initiated in the form of a proposal. After the referendum is passed, all nodes will be synchronized to the Runtime update. The runtime update is completed at the height of the specified block. The entire process does not need to suspend the node to upgrade the client. It is a real seamless upgrade of on-chain governance. A transaction is upgraded, and the transaction approval is governance.
In addition to the referendum, Substrate governance introduces the concept of a "chain parliament", which consists of a fixed number of stakeholders (6-24 members). Each council member is elected by a staggered community approval vote (similar to a vote for approval), and members participate in representative democracy and are constantly rotated when their electoral term expires. In addition, when the number of members is small, the rotation period is shortened to ensure sufficient dispersion in disguise.
From the perspective of the Polkadot governance process, it is divided into three stages: the first is the national proposal stage. Everyone can pledge DOT to make a proposal. A proposal with a high number of votes can enter the referendum stage. Everyone can choose to support or oppose the proposal. Proposals with sufficient support will be implemented, but a parliamentary system has also been added. The parliament can initiate a referendum or cancel the existing referendum. The parliament also directly addresses the potential for low turnout through adaptive group bias.
This adaptive quorum deviation is to solve the problem of low voting participation. If the parliament proposes to vote, and the voting rate is low, then the proposal under discussion needs more negative votes than yes votes to reject Referendum. However, under the same low voting rate, if an ordinary token holder proposes to vote, then the proposal requires much more votes for approval than against.
The adaptive quorum deviation provides flexibility in low turnout situations and provides flexibility in low turnout situations through voting majority requirements based on turnout rate, which is equivalent to changing a way of thinking to solve the problem of voting participation. The vernacular put it in a nutshell: if the number of voting participants is small, the majority of people who need to participate must agree to pass the proposal.
Chain Catcher: What is Polkadot's next route planning?
Fuyao: Gavin has now completed the initial version of the standard format for interaction between XCMP chains. This is not only "cross-chain" messaging, but also a "cross-consensus system" messaging format.
Polkadot's XCMP, or cross-chain messaging function, may be delivered in the second half of this year or early next year. Next, Rococo, the cross-chain test network, will restart a new one to test new features.
The launch of parachains is gradual. The first batch of parachains will not be generated through auctions, but system-level parachains. For example, the governance module is taken out as a parachain. The purpose is to reduce the burden on the relay chain and increase More parallel chains. This is the current Polkadot official plan.
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