IOSG VC: The investment logic of Polkadot ecology

Editors Note: This article comes from PolkaWorld（ID：gh_6c4c2038ddba）Editors Note: This article comes from

Jocy: I have been thinking about how to better express this question, but I haven’t found a vivid statement so far. Maybe it can be understood like this:

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Polkadot provides an open-source development framework that allows developers in the traditional world and the blockchain field to develop a blockchain relatively easily, and then the data between different chains is interoperable and shared security. The processing capacity of each parachain is exclusive, can reach hundreds of TPS, and can continue to expand horizontally on its own. And all new parachains are connected to the Polkadot ecosystem by default, enjoying the benefits of network sharing security and interoperability.

The core of Web3.0 is to make more data interrelated. Polkadot based on blockchain will bring privacy protection, data security, consensus-based governance and other decentralized features, and thus lay the foundation for Web3. 0 cornerstone.

At the core, we have taken a fancy to three different capabilities of Polkadot:

1. Substrate - addressing interoperability:

Substrate is similar to the same underlying library, development platform and toolkit as Polkadot, providing the underlying framework, while the upper-level consensus, voting logic, virtual machine environment, node communication, database/file storage, etc. are used as various modules, and the block generation time of the parachain Rules such as whether there is gas, token governance, etc. can be customized based on Substrate. In fact, one-click chain issuance is not a new scenario, and many public chains also use it as a standard design. The difference is that Substrate-based deployment makes future compatibility with Polkadot easier, including direct integration with Polkadot. Convenient grafting, security sharing, implementation of interoperability, synchronization of Substrate framework updates, etc.

For Polkadots Substrate, Polkadot is one of the projects built using Substrate. Anyone can build their own blockchain project based on Substrate, even if it has nothing to do with Polkadot. It is a very smart move to release Substrate early before the launch. Compared with looking for parachains and running-in after the mainnet launch, the open source of the Substrate framework as soon as possible is conducive to allowing potential partners to participate in the development as soon as possible. Gather momentum before the online launch, and quickly iterate after the main online launch. This is why although Polkadots mainnet launch is later than Cosmos, the ecology is already ahead.

2. Third-party features of outsourcing and extension - addressing scalability:

Polkadot itself does not have and does not need smart contracts. If there is a need, just call the underlying smart contract module to build a contract chain. Polkadot only needs to focus on security, consensus coordination, state storage, data call and other cores related to multi-chains, and the overall is relatively lightweight. The advantage of this design is that, for example, in the smart contract scenario, multiple teams can work hard and compete on the story of the smart contract parachain.

3. Shared Security Shared Security:

The second point is at the core of Polkadot, Polkadot has a shared state between the relay chain and all connected chains. To ensure that the effectiveness of the entire system is maintained, individual components are not damaged. This is also the biggest difference from COSMOS, that is, the shared security feature, attackers cannot attack a specific part or parachain, and all parachains and system modules in the network enjoy the same security guarantee. Mutual trust between parallel chains lays the foundation for the establishment of more economic relationships.

Therefore, I think that as an ordinary investor, if you miss the first two rounds of DOT investment, you can wait for the public sale. However, as an investment, I think you should look forward to more interesting projects that will be updated in the future, projects at the bottom of Polkadot and the ecology seek new investment opportunities.

Jocy: At present, the tokens for Polkadot’s first and second phase investors have been issued in the ERC20 wallet that everyone reserved at that time.

I understand that the problem of mapping refers to the Kusama token of the Polkadot Claim testnet. At present, all DOT holders in the entire network can claim Kusama tokens. The official listing will be arranged after the mainnet goes live, because Polkadot tokens will not be able to be transferred before the mainnet goes live, so I don’t recommend everyone to buy DOT in the primary market at the moment.

Regarding the issue of Kusama token transfer, Kusama can complete the transfer operation only after Kusama launch and after the PoA network has been running stably for a month before switching to the PoS network.

Jocy: I think Kusama is not an investment value. As Polkadot’s test network, it has high expectations and it also indicates that there will be a lot of chaos, and as a network that does not have any financing and relies purely on the Polkadot main network. For a one-map network, it should not be given too much investment and hype value.

Kusama serves as Polkadots pilot test chain (canary network). It is an early, unaudited, fully experimental pre-production trial network designed to help understand how various cutting-edge technologies can be introduced under real economic conditions, including areas such as governance, staking (mortgaging), and sharding. Kusama will undergo a network switch from PoA to PoS in the next two months.

Investors who participate in investing in Polkadot can receive the same amount of KSM through official channels. For those who do not currently hold DOTs, the Web3 Foundation will use some of their DOT shares to set up a KSM Faucet.

According to the Polkadot network, W3F owns 30% of DOT, and before Kusama went online, W3F held 3 million KSM. This part of KSM will not be circulated in the market, so the circulation value can be preset as 7 million KSM at present. Of course, a large part of KSM will participate in staking, and the remaining part will be circulated in the secondary market.

The official does not encourage the trading of KSM, but some exchanges have already launched KSM trading. According to the current official statement, 1% of DOT will be airdropped to all KSM holders in the future. Then, it should be said that the KSM base price is 1% DOT.

This graph is the current Polkadot Eco-Map we built:

Jocy: I think the current problems in the Polkadot ecosystem are as follows:

1. Because Polkadot is designed with a small number of verifiers, if a large amount of data is generated, can Polkadot guarantee fast block generation and ensure that the network will not be blocked. In extreme cases, when the pressure on the relay chain is infinite, in order to ensure network security, the relay chain must randomly place its verification nodes on different parallel chains for secondary verification, which will cause verification nodes The work efficiency becomes lower and the number of available nodes becomes less, so the entire network may also be congested.

2. From the current point of view, there are not many practical applications on the Polkadot network that can be used by ordinary people. How to integrate Polkadot and traditional business, educate and encourage everyone to join the Polkadot network, so as to complete the transition from Web2.0 to Web3.0, is a difficult point.