What Is Polkadot (DOT)?

Polkadot was designed by Gavin Wood, one of Ethereum's co-founders, and developed with contributions from the Web3 Foundation and Parity Technologies. The relay chain at the center of the network validates the blocks of the specialized blockchains connected to it, called parachains. This way, each parachain benefits from the relay chain's security without having to set up its own validator set (shared security). Parachains are generally built with the Substrate framework and communicate with each other using the XCM messaging format.

The DOT token has three main functions: participating in on-chain governance votes, being staked under the nominated proof of stake (NPoS) model to secure the network, and parachains obtaining a slot or processing capacity on the relay chain. Parachain slots were initially distributed through auctions in which DOT was locked; in the later period, the network moved to a model in which processing capacity (coretime) can be purchased more flexibly.

Although the multi-chain architecture offers strong interoperability, the learning curve is steep for developers, and the ecosystem's success depends on parachains being able to attract users. Kusama, on the other hand, serves as Polkadot's more experimental, fast-updating 'canary' network.