Polkadot 2.0: The Next Evolution of Multichain Technology?

The ambitious Polkadot (DOT) multi-chain network has been a huge success so far, but it’s becoming clear that it will soon need an upgrade to meet the expectations of modern users.

This is where Polkadot 2.0 comes in. It is an improved version of Polkadot 1.0 that aims to revamp key areas of the ecosystem to create a platform that is bigger, faster, and easier for users to enjoy.

Given that Polkadot’s “next evolution” will have a major impact on how the platform operates and the rules it will follow, it wouldn’t be a bad idea for current or future DOT holders to be aware of what changes are coming.

What is Polkadot 2.0?

To understand Polkadot 2.0, let’s first take a step back and look at the Polkadot network itself. Polkadot is a multichain platform designed by Ethereum co-founder Gavin Wood and several other key developers at Parity Technologies.

Parity is an Ethereum-based development company, but ironically, it is also where the idea for Polkadot first came about and where the project’s most important developers gathered to drive the project forward.

Polkadot is a concept designed to allow layer 1 blockchains like Bitcoin (BTC) and Ethereum (ETH) to interact with each other.

Polkadot integrates all of these blockchains into a single network so that they function as one, which in the cryptocurrency world is called interoperability.

But this level of ambition is not easily achievable in practice, and may require sacrificing the speed and accessibility of the platform. Ultimately, Polkadot will need to become a modernized platform for all users to truly realize its benefits, and that will require a software overhaul.

The Polkadot developers have done a great job of creating an ecosystem that can support their ambitious vision, but Polkadot 2.0 is not intended to change the purpose of the network; it is simply intended to be a better version of its predecessor, and aims to build on what was built on top of Polkadot 1.0.

Why should I upgrade Polkadot?

When Polkadot was first developed, much of the focus was on ensuring that the platform provided blockchain interoperability.

How to actually get there wasn’t a priority. As a result, many of the early features were considered ‘placeholders’ that weren’t designed to stand the test of time, and as a result, they are now aging.

The main problems Polkadot is facing because of this are:

• Slot Auctions: Here, DOT holders can stake their tokens to rent a parachain slot. A parachain is a custom blockchain that developers can insert into the network. The problem is that if someone wins the auction, they get more block payload than they need. Therefore, the auction system wastes resources and limits accessibility because the auction staking price is too high.
• Slow block times: Block time refers to the time it takes for a transaction to be processed. Polkadot lags behind most of its competitors, and as a result, purchasing a parachain or processing a payment can feel slow and unresponsive.
• Project Limitations: Gavin Wood says Polkadot is “Global Supercomputer” It is a place where anyone can build whatever project they like. Currently, projects are limited to parachains, which limits evolution as there are many non-blockchain-based developments, such as smart contracts, that people want to build on Polkadot.

A quick disclaimer is that several blockchains have embraced the “2.0” upgrade mentality before Polkadot, including Ethereum and Polkadot’s own canary network, Kusama. However, as we’ve just seen, Polkadot has always been designed to evolve to improve upon the foundation it was originally built on, even if it doesn’t seem to follow the trend.

Major Upgrades in Polkadot 2.0

Since Polkadot 2.0 first appeared on the roadmap, Gavin Wood and other developers have mentioned a number of potential upgrades and improvements, but the ones listed below have received the most attention and will likely have the biggest impact on the network.

Asynchronous Backup

The first upgrade in the Polkadot 2.0 release is asynchronous backup, an initiative designed to improve the speed, functionality, and accessibility of parachain blocks (parablocks). Parachains are technically their own blockchains, and are simply leased and customized by the winners of the parachain auction. That’s why some people in the Polkadot community might call them parablocks.

In the current network, each parachain must rely on the most recent block for what is known as “backing.” This dependency limits overall throughput, but asynchronous backing breaks this chain, allowing parachains to operate faster without this dependency.

The easiest way to understand this is to think of placing parablocks on a conveyor belt. Currently, you can only place one parablock on the belt at a time while it is being built, and it must reach the end and be completely finished before you can start building the next parablock.

This method is slow and takes too much time, but with asynchronous backing, you can place multiple Parablocks on the conveyor belt at the same time, which will produce them at a much faster rate – 12-6 seconds to be exact.

In addition to reducing transaction times, asynchronous backups allow Parabloc to store 4x more data, allowing developers to create more ambitious creations and chain use cases.

All of this will obviously be useful for developers, but it will also be beneficial for investors, as they will have many more blocks to spend their tokens on without having to wait for new tokens to appear.

Agile Core Time

Agile Coretime is an attempt to completely overhaul the parachain auction model with a new system. As we have seen, this model faces the problems of wasted block space and limited ask prices.

This would shift the auctions to a more “market-oriented” orientation, allowing someone to buy exactly what they need, when they need it, rather than investing DOT in the long term to buy a bunch of resources at once, many of which they likely won’t use anyway.

So instead of committing to a parachain slot for 2 years, you can purchase it for 1 year, 1 month, or even 1 hour, depending on your needs, allowing you to better adapt to your current needs.

This new iteration has two main benefits. Firstly, it will incentivize DOT token holders who may not otherwise be interested in leasing and building parachains to try it out and dig deeper into what the platform has to offer, as the amount of DOT required is smaller and more dynamic.

On the other hand, since DOT itself is now used to purchase parachains directly rather than for staking, this could increase the liquidity of the token, which could lead to long-term, sustained demand for DOT, which could in turn drive up its value.

Elastic Scaling

In simple terms, elastic scaling allows the Polkadot network to distribute power and resource allocation more fairly across multiple chains. This is especially useful for parachains that have larger workloads and therefore require more support from Polkadot than they currently receive.

Elastic scaling allows you to add core time to your parachain whenever you need it, giving you the option to improve overall scalability even when you hit a roadblock or have too much data to process.

This upgrade is primarily aimed at developers with ambitious projects and DeFi applications (dApps) in mind, with the goal of presenting Polkadot as a platform on which anyone can start developing without any restrictions.

Hermit Relay

To understand how Hermit Relay will impact Polkadot, we must first understand the existence of the relay chain, a central hub that keeps the entire network private.

The relay chain provides security, governance, and other functions to the entire network, but it also means there is a lot to keep track of, as each transaction and creation that occurs in real time must be verified.

The Hermit Relay model offloads much of this “baggage” onto the parachain itself, freeing up some space and resources for the relay chain to focus entirely on validating the network and speeding up processes. Like asynchronous backups and agile core times, this makes the process of building and purchasing parachain space much faster and more streamlined.

jam

JAM (Joint Accumulate Machine) is designed to replace the relay chain and expand the possibilities of what people can create on Polkadot.

Currently, parachains are the only development option, and their accessibility is limited by their price and the hassle of renting slots, as they can only be acquired through auctions.

JAM proposes a complete restructuring of the relay chain to give developers more freedom to build other services that fit their specific needs. A prime example of this is smart contracts, which are traditionally not supported natively on the relay chain but will be accessible once JAM enters the network.

Since JAM essentially deals with the relay chain, which is the heart of Polkadot, it will have to replace everything at once, rather than in stages like other upgrades. As a result, it is likely to take several years and is seen by many as the final step needed to complete the launch of Polkadot 2.0.

Small but important upgrades you should know about

These may be the biggest changes introduced in Polkadot 2.0, but there are several other smaller upgrades mentioned by Gavin Wood and team that have also caught people’s attention, some of the most popular examples being:

• Internode Mixnet: An encrypted transmission messaging service that allows users to communicate on-chain and off-chain without the risk of IP data and information leakage.
• Sassafras Accord: A new consensus algorithm that addresses some of the issues with current algorithms: BABE. It is primarily designed to enhance network security and provide high-performance routing.
• Smalldot: A lightweight client that allows people using the Substrate build tool to connect directly to the Polkadot network without any third-party intervention.

When will Polkadot 2.0 be released?

The Polkadot 2.0 launch has already begun, with the official launch of the asynchronous backup implementation in May 2024. For the other upgrades, there is no exact date for when they will arrive, but the good news is that many of the upgrades, including Agile Coretime, have been successful on the Kusama Canary network, indicating that the release to mainnet will happen sooner rather than later.

On the other side

• Polkadot has won the hearts of many for its ambitious vision to become a leader in Web 3, but it is unclear whether Polkadot 2.0 will be fully embraced by the current community.
• Unlike many other blockchains, Polkadot relies entirely on broad community adoption to grow and scale. So while these features can be tested to verify their practicality, only time will tell how people in the Polkadot ecosystem actually feel about them and whether they can be sustained in the long term.

Why this matters

Polkadot is moving at a breakneck pace, and given how popular it has become in the crypto space, you won’t want to be left out of this change.

With Polkadot 2.0, the network is moving one step closer to Web3, where cryptocurrency users have complete control and privacy over their data and assets. This is especially important now that the eagerly anticipated release cycle has finally begun.

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