DeFi on Polkadot

DeFi has grabbed all the attention of crypto users, platform developers, and even the investors for the last 2 years. Many projects are now building on Polkadot to give it a slice of DeFi pie. 

Polkadot parachains function as separate blockchain but due to Relay Chain at the core, they can communicate with each other and transfer value. Interestingly, Polkadot blockchain development companies are building infrastructures like a stablecoin, DEX (decentralized exchange), and staking liquidity to rope Polkadot into DeFi. 

Interestingly, Polkadot promises interoperability which means that whatever happens on a Polkadot parachain can be moved onto Ethereum. To state an example, the user can deposit collateral in the DeFi structure built using Polkadot and receive the native stablecoin of that platform. Then he can send that stablecoin to Ethereum and use an Ethereum DEX to buy an ERC-20 token. Interoperability unlocked!!

Ethereum implementation on Polkadot

Undoubtedly, Ethereum is the first and the biggest platform that offers smart contracts to users. As a result, it becomes very important for the Polkadot ecosystem to complement Ethereum and become interoperable with it. 

Recently, many projects that have been developed act as EVM-compatible smart contract parachain on Polkadot. Effectively, they offer an experience that is pretty much similar to Ethereum. This is important because the Ethereum network has remained congested for a long time now. Due to the rising gas fee and scalability issues, developers and users are looking for alternate blockchains which in turn has a fragmented market. 

The projects that help with the implementation of Ethereum on Polkadot help solve this problem of fragmentation. Polkadot blockchain development provides dApp developers an ideal platform that is Ethereum compatible and has a bridge that connects Ethereum and this platform. Because of the strong Ethereum compatibility, the developers can use the existing Ethereum ecosystem tools e.g., Metamask to build dApps. The biggest advantage is that all this while the users can also access Polkadot’s on-chain governance, cross-chain integration, and more. 

Smart contract platform on Polkadot

Polkadot blockchain development offers its Substrate framework to support smart contracts. These smart contract platforms on Polkadot are being integrated with Ethereum Virtual Machine, the dApp platform. This enables users to easily deploy smart contracts written in Solidity on Polkadot. 

Cross-chain identity 

As Polkadot development supports interoperability, it makes complete sense to build cross-chain identity projects on top of it. Using aggregated cross-chain identity, the projects could use the identity’s quantified data to offer graded services. 

Cross-chain bridges 

The Polkadot ecosystem is developing at a rapid speed. But without bridges to blockchains like Bitcoin and Ethereum, it will turn out to be another blockchain functioning in silos. Currently, many projects are building cross-chain bridges, DeFi products, and infrastructures on Polkadot. 

Will Polkadot kill Ethereum? 

As an entrepreneur who is thinking of building a dApp or a DeFi product, you might be finding it difficult to choose between Polkadot and Ethereum. With Ethereum 2.0 roll-outs happening, the dilemma must be growing every passing day. 

While many developers out there believe Polkadot might kill Ethereum, the fact is that Polkadot and Ethereum will likely complement each other. Also, it cannot be ignored that Ethereum has a critical advantage over all of these and that is a long-established and very large developer base. Thus, the products that bridge these ecosystems or enable compatibility for different services are very important and will have long-term sustenance. 

Wrapping it up

Polkadot Development is rapidly picking pace. However, even the brightest idea might not turn out to be successful if the product development is not carried out in the right way. 

At Antier Solutions, we harness our technical prowess, blockchain expertise, and deep domain knowledge to deliver world-class blockchain projects. If you have an idea in mind, talk to our experts and understand the best way to turn it into a working product. 

Connect with our subject matter experts to share your needs for Polkadot blockchain development. 

The post How does Polkadot support the development of ground-breaking projects? appeared first on Antier Solutions.

Before we set to understand the fundamental differences between Ethereum and Polkadot, let us first understand the structure of Polkadot:

Polkadot is made up of the following 4 structures

• Relay chain
This is the heart and core of Polkadot. That is because it is responsible for maintaining Polkadot’s cross-chain interoperability, shared security, and consensus. The relay chain is built with a blockchain building framework known as Substrate.

• Parachains
Parachains are unique individual layer-1 blockchains that run in parallel with Polkadot. However, these are secured by the central Relay Chain. Effectively, the security, scalability, interoperability, and governance of Polkadot are shared by these chains too. These parachains can also connect to external networks like Ethereum with the use of cross-chain bridges.

• Parathread
These are a specific type of parachains that connect to the Polkadot ecosystem with a pay-as-you-go model while the parachains lease the entire slot.
These threads are used by projects that do not need the continuous support of the Polkadot ecosystem.

• Bridges
As the name suggests, the bridges enable interoperability inside and outside the Polkadot ecosystem. These facilitate interoperability among parachains and parathreads, and also Bitcoin-like external chains.

Polkadot vs Ethereum 2.0

The demand for Polkadot blockchain development has increased tremendously over the last couple of years. However, experts believe ETH 2.0 is going to give Polkadot tough competition. That’s because both ETH 2.0 and Polkadot use sharding to solve the scalability issues.

What is sharding?

In simple terms, sharding means breaking something into smaller pieces. In the case of blockchain, it means the blockchain is broken down into small chunks known as shards. These shards record and authenticate transactions in local shards. Let us have a look at how Polkadot and ETH 2.0 differ.

Sharding works differently for ETH 2.0 and Polkadot
ETH 2.0 uses Beacon Chain to control the parallel shards. These shards must have the right structure to connect to the Beacon Chain to put in all the information.

On the other hand, Polkadot uses Relay Chain for connecting shards, known as parachains, and is capable of operating independently. Interestingly, the way Polkadot accepts shards is much more flexible than the way Beacon Chain accepts the shards.
Because of this, Relay Chain is capable of offering bridging. As a result, the applications built on ETH 2.0 will be able to connect to the Polkadot ecosystem but the vice-versa is not true.

Scalability
For DeFi developers, scalability is the key and the Polkadot ecosystem promises higher scalability because it is capable of bridging. The bridging allows the Polkadot ecosystem to accept outside apps that are faster and cheaper. As a result, Polkadot development gives developers and users access to faster and cheaper dApps.

Also, for Ethereum 2.0 development, developers have to learn Solidity. However, Polkadot blockchain development does not require developers to learn Substrate; they can actually bring their own tools and develop.

Polkadot is ready
One of the most important aspects of choosing between the two is that Polkadot is ready while ETH 2.0 is still a distant dream.

Why Polkadot for dApps?

Undoubtedly, Polkadot is a scalable blockchain and offers faster processing speeds. As a result, the DeFi apps built on Polkadot can process transactions faster and cut down on transaction fee costs too. In terms of security and transparency, Polkadot is a top-notch blockchain.

Moreover, the Polkadot blockchain development team promises to deliver a TPS (transactions per second) of over 1 million. And this is like 10 times of what ETH 2.0 promises to bring in.
Final Thoughts

Polkadot blockchain development has given a new dimension to the blockchain world. Its interoperability with other blockchains has broken the silos and is helping build a truly decentralized internet. Moreover, Polkadot promises to support the development of anti-censorship applications, faster applications, and take blockchain development to a completely next level.

At Antier Solutions, we have been able to develop innovative dApps on Polkadot because of our Polkadot development expertise. If you have a dApp idea in mind, bring it to us and let us together bring it out to the world.

Connect with our subject matter experts to share your needs for Polkadot development.

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