How Polkadot scales dApps on a resilient infrastructure — Alex Dimitrijevic | Web3 Foundation

Hi everyone. Uh not a big crowd though. Sorry for running late. Um I'm actually sick after getting married on Friday. So it's uh it's good to be here.

Anyway, um today I'm going to be talking about um how polka dot will scale dabs um which is something of a big change coming to this ecosystem of app chains and uh something which is super important to to go through in the the featuring road map for the next let's say year and a half. Um so just a quick overview of of of polka dot and what what it was um and what it is and what it will keep being uh although this this this big change and upgrade um polka dot is known to feature power chains or application dedicated chains u parity which is the company that mostly developed the infrastructure and tooling behind the ecosystem has built substrate or poldk which you can use to deploy a lot of chains leverage the native protocols and become a part of the ecosystem and and and leverage the security and the infrastructure which comes from the core protocols uh that developers built. Um just beyond that there are a few things which which need to be went through. Um so the relay chain which is a layer zero which provides the security power chains there are 40 plus of them which are leveraging native protocols to become part of the ecosystem and share um pretty much everything through XCM which is the native um crosschain messaging protocol. Um right now there are uh around 40 plus power chains.

However, you anyone can use Polcut SDK to develop its own um custom chain or blockchain. Um and there are between 10 to 20 known and marketed and very well grown um chains which we talked to and and kind of try to leverage their use cases to become power chains as well. Um so a few just kind of very very basic uh comparisons um on pola dot chains and other chains which can be deployed through different SDKs or or even L2s. Um pola dot features security highization application specific use cases interpretability shared consensus low fees and the centralized validator set. Um when it comes to um other chains specifically like L2 obviously they rely on on on Ethereum's blob capacity and settlement finality and everything happens optimistically um they can't easily inter interoperate meaning they need third party integration such most commonly bridges um which are again questionable in security uh they need their own security and need their own validator set which is again not the case for polo chains Um when people talk about polka dot sometime usually they kind of just ask whether if we're dead or not.

Um just a few highlights based on what has been happening in the ecosystem for the last few years. We brought mythical games which was the largest gaming project in Ethereum. they launched their partnership with uh NFL and FIFA for the gaming g onchain games called FIFA rivals and NFL rivals. Um these days mythical actually holds the top three places in in all NFT volume as well because they have their web to NFT marketplace which is specifically utilized through these games. Peak frequency origin trail and neuro web and hydration as well are very very active and and common uh commonly spoke spoken about power chains um we can see the frequency of work with work works with Miwi uh they are also in talks with Tik Tok uh which is tied to the US um kind of happenings these days and um hydration which is a highly efficient D5 like all-in one-stop shop for D5 both like a money market in D5 which achieved more than 200 million TVL these days.

Um okay so why hasn't pol achieved success at greater scale this is something I I usually speak about and um kind of first of all the the the the the barrier to entry the polar ecosystem to deploy a power chain and become a part of the ecosystem is actually um uh was was too high. We had something called uh crowd loans and and power chain auctions. So the first paren auction was like $50 million for a chain called the Kala. The last one was around $50,000 which again if we start with this hypothesis it's just too expensive for a project which doesn't have a mature use case in this industry to pay for that price to become a power chain. Um although polka dot was very is very resilient in its lower level protocols we failed to look at a bigger picture to use these investments to get the services and application layer thriving.

Uh we weren't built as a part of Ethereum we haven't forked Ethereum which means that building everything from scratch you can either focus on lower level protocols the resilience as we'd like to say it or the more of the application or consumer layer. Obviously we we are non EVM compatible um and we we failed to look at those primitives to attract more application developers to come and build on polka dot. We focus more on core chain protocol developers to deploy their chains to leverage more of this blockchain infrastructure and so on. Um we also failed to look at DeFi as as the main building kind of primitive of a thriving ecosystem. Um and when you pair all of these together um obviously the nonvm stuff uh was also blocking the core infrastructure providers such as custodians or centralized exchanges and this specifically screwed us talking with Revolute talking with unis swap talking with some other tier one projects which are kind of you know mostly accounting for the top performing KPIs in the wider industry.

Um again as a part of DeFi liquidity incentive Ethereum bridges all of this was underdeveloped as a part of the ecosystem. Um, next to that my colleague and I parody I think it was later uh in in the like the second half of of last year we did the the big market research project and um I guess the most important thing that you can be drawing from here is actually that is the the the image here and that's what most of decision makers from CEOs and CTO's can actually um let's say uh uh um figure or uh score when it comes to choosing the blockchain infrastructure. So scalability or performance was the first one. The least um adopted or the least wanted one was decentralization which goes against the core blockchain kind of um idea and and primitives. But again at at these days I guess the the scalability the high TPS low latency they account for big and significant UX which is something that again is super super important um for for project choosing their blockchain.

Then Devax ecosystem growth or activity in in the number of users and so on. Unfortunately security comes forth no one thinks about it until there is a black swan event. So something that also highly contributes to Poland's new road map is the something we've seen through a spamming kind of um use case or or experiment and and something we managed to do as an ecosystem not per not web3 foundation solely. This was a big ecosystem effort. We managed to get um Kusama which is the pola sister or canary network to achieve 144,000 transactions per second.

So this native this legacy polo infrastructure and and protocols were uh uh are proven to get the huge results in the market. Um and there are three things or three updates which are proving for that. First of all we switched from the um the crowd loans and the auctions to something which is called core time. Essentially what you can be doing is um just renting one core per month which is similar to AWS's uh spot instances instead of reserved instances for the majority of the next two years or three years meaning you can pay per usage for the block space that you use and the price for that is between 100 and a,000 dot uh which at this point in time is between 400 and and and $4,000. Um so in that means that if you take into account engineering cost etc we actually 100xed um or sorry lowered down the price to deploy and run a chain by 100 times on average which makes the entry barrier much much lower.

Um when it comes to achieving those high scalability numbers, the elastic scaling is something maybe some of you know the the term parallel processing which is the kind of splitting the execution into multiple processor or units. Meaning that not one par one power chain does not need to run on one core specifically, but they can have multiple cores assigned to their power chain and split the execution. meaning also lowering down block times and having this larger throughput. Just a quick overview and and um maybe this this flow that Philip mentioned and um kind of these were the results of the market research project which have been done in which has been done in the last year. Obviously, some of the trade-offs in in using Polka Dot high entry barrier resilient in its lower level protocols, but failed to look at a bigger picture to attract more application developers failed to look at DeFi as the foundational piece for building a thriving ecosystem.

Um, again, paired with the general market research stuff, um, we did come to a conclusion that Pallet is not where it's supposed to be. Um, how do we plan to change that? How do we plan to improve? How do we implement plan to position better in the next years? Um obviously like I mentioned already the spamming effect and something that is a part of the polar road map which is called polit 2.

0 a synchronous backing lowering down the block times uh core time agile core time which is paper usage monthly block space um spot instances uh and elastic scaling which is parallel computing or parallel processing. This has already proven to be working with Kusama achieving more than 130,000 transactions per second on a live network. Um the second portion of of the improvement is actually switching from the chain deployment first thesis and getting back on the application thesis. Um this is by the way the different route that Polygon and Optimism for example took and avalanche because first they had the application layer. They had C chains and and and application blockchains, single ones which are Ethereum layer twos and eventually they um showed something in the industry or introduced the industry with different chain deployment kits or creating subnets creating ZKbased chains or other infrastructure which are in running in parallel to their chain.

Now we're doing the vice versa which is a little bit bad from the go to market perspective and you'll see why. But what we are doing is we are taking one of the system parach chains in polka dot and we are adding a new layer of new application layer which is featuring two main points. Um, one is PulaVM or PVM which essentially has the solidity compiler and the second part is the Ethereum JSON RPC which sits on top of the substrate node meaning that Polca dot will get its native Ethereum compatibility. Finally, all the integrations, all the tooling, everything when it comes to DevX will be on Poloca dot natively, not through third party chains, not through new um third party infrastructure providers or something like this. It's going to be native on Pola.

L1. Um it's very important to mention it's not EVM. It's it's it's PVM or PACA VM which has a different bite code and and so on. and the team at parody is doing their best to to feature um the maximum Ethereum compatibility. Um it's super important to mention it's one of the bulk of the native chains which everything before I've mentioned from the spamming effect Kusama and so on will be inherited as well.

Um you can see that there are a lot of different chains in as a part of the polarot ecosystem. Pola hub is the one of the chains which will be designed for DAPs meaning unis swaps of this world meaning a of this world meaning all other dabs who wishes to deploy natively on polka dot. Something that we are assuming we we will be achieving here obviously is the easier integration with infrastructure providers and compelling pitch to these tier one and tier 2 deps. With that, we aim to rebuild a thriving application ecosystem and create the abundance of non-technical KPIs or ecosystem development perks um which will attract the larger user base to come to polka dot and this is the foundational piece to scaling from there and offering them our chain deployment services. Um maybe something very very interesting to mention is that um there are a lot of opinions about how there are a lot of L2s and now with the pola.

hub Hub mentioned what we aim to do catching up is just the cop the L2 copy pasta success and it's the reality we are trying to achieve the maximum Ethereum compatibility and we're talking to mainstream tier one applications from unis swap pav to others to make sure that foundational metrics such as TVL volume and so on are being satisfied so we can then from there scale because in order to overcome we first need to be able to compete. I think that at this point in time, Avalanche has 1.1 billion TVL. We have 250 million TVL. That's four or five times less than Avalanche.

Um, it's just sad. We have to go through this again, copy pastel to success route, see the the mainstream deployments that we can gather with this and build our use cases to get the unique value props. Um the unique value props is something that comes mostly through PVM or this pula VM. So the smart smart contracts deployed in solidity and executing on PVM can run 10 times faster 10 to 100 times faster than EVM. It means between 450,000 state reads per second.

Um also super super super important thing to mention PVM is based on risk 5. And if you've been following Vitalik's work for the last few, let's say months since the chaos, communism and so on, um you actually could see that he proposed for Ethereum to go back to being the execution unit for L1 as an L1 chain and feature a risk 5 machine. This is exactly what Polca dot is doing for two years now. And in this case, like I mentioned, these are the benchmarks which have been proven on Poloca dot. Um and and and something that is coming once we caught up with all the unis swaps and custodians and all the ethereum fancy stuff that we missed out the bridges and so on in the last few years.

Um again this the a few of the benchmarks which we have proven here is that also apart from the higher comput the sorry the higher uh uh um performance or more faster contracts the higher computation power is also included meaning that um high resources um uh calculations that specifically go onchain or specific infrastructure that needs to be built in a centralized and insecure off-chain way can now be called directly from smart contracts. This is something which also has a native that has a more of a step to a native and true blockchain web3 kind of um holistic approach to it as well. Apart from the businesswide perspectives of of like running a very heavy ZK based instances and something that a lot of ZK projects are fighting with. Um actually we can see that um ZK syncs of this world, risk uh what risk zeros of this world and so on have already been trying to settle this resources into into calling this functionality directly from contracts. Again something that Polcadot will be um able to achieve from the fourth quarter of this year once Polcadot hub is actually there.

Um obviously from there we can we can explore use cases. There is a polar hackathon right now where you can even test a lot of these things interact with PVM with solidity smart contract with contracts with Ethereum tooling but also tap into something that is unique the native crosschain messaging protocol. We have 40 plus chains already deployed as a part of the polar ecosystem. Meaning that if you now run a contract on hub, you can also call the functionalities of either of those 40 plus different rollups or power chains which exist in the polar ecosystem. Um, and also like I mentioned, if you run a if you run a DAP yourself, if you want to deploy a DEX, we'll be super happy to support you explore the unique use cases.

And once you attract enough users, you can obviously have the natural path to scale from a DAP onto a parachin to kind of cover it up. Polcadot started as a parachin only, the chain deployment first thesis. We did we were not Ethereum compatible. We built opposite to Ethereum. Now we are circling the whole value offering getting a compelling Ethereum compatible smart contract roadmap to deploy your DAP and have the natural path to scale towards the par chain.

Um that's that's it. Um I'm sorry that I actually screwed up with the with the time here. I prolonged this presentation a little bit. Um there's a lot of funding initiatives. There's a lot of good incentives that you guys can can also be a part of if you want to build your first app on PolCa dot.

Like I mentioned, there's a hackathon out there right now. Um, by the way, I spent two years at Parody before joining web3 foundation a few months ago. So I'm very deeply integrated within the tech teams which also gives me a little bit of leverage and making sure that we're bringing the right market data into the core engineering workforces and power building out this Ethereum compatibility and smart contracts and polka dot. Um so yeah I I can wrap it up here but if there are any questions I can see more people now than uh opposed to when we started.

Let's start with a big applause. [Applause] Okay. So, we can start with questions. We have time. Um, I see one hand in the back.

Yeah.

Um, Oops. Hello. Um, my name is Dennis and uh, we are actually running the hackathon for Polarium compatible smart contracts in Risk 5 compatible Polar VM and we invite everyone to hack uh, on our tracks. Um could you Alex be a little bit more specific about uh your perspective on this tracks?

Uh can you repeat the question? What are my expectations from the track?

Yeah. Yeah, it's a it's a good question. So um and hey Dennis. Um, so just maybe the the the most important thing to mention and highlight here is you guys saw and heard the road map of us trying to just figure out our way into filling the gaps which we're what we're building right now the very basic implementation or the use case for it is something that L2s have seen for quite a while. Hence when it comes to core business-wise or saleswise go to market strategy we want popular code bases deployed in polka dot most of those are open source like go ahead and try them yourself we are building something which is maybe more similar to say for example as Ethereum compatibility and this splitting of different infrastructure rather than L2 but which means that you can actually test and tweak and and tinker with a lot of different things um which at the end of the today means that all of those popular code bases which are open source can be now contributed and and kind of developed on polka dot as well.

So my expectation would revolve around a seeing what's not Ethereum compatible since we don't have the same bite code as EVM b some of the tooling that we might need. There's always a good learning curve when it comes to what oracles do you prefer chain link redstone pith something fourth supra then um block explorer do you need the conduct verification tool how what do you use for debugging what do you use for this and that from the tooling perspective to again playing around tinkering with these code bases and so on I really really really hope that we can get a significant learning curve and and kind of uh feedback from smart contract developers and meeting that almost native Ethereum compatibility and how some of the most popular open source code bases can actually work any more questions maybe okay then let's I see hand there yeah hi my name is Stephen I invol in polka dot for a while so from my point of view the two main problems of polka dot is lack of users and lack of liquidity. How you going to solve this?

Good questions. Um, first of all, the liquidity with the core Ethereum compatible infrastructure which now will be kind of easier to integrate. When it comes to liquidity, what provides liquidity? First, it's the well, let's assume it's in in this order. First, the applications and then the infrastructure.

Um we battled the fight with Fireblocks for quite a while. They did not want to integrate Ethereum uh sorry nonem chain for quite some time. Fireblocks screwed us with Revolute which was bound to provide more than 200 million in stable coin issuance. That's 200 million liquidity. That's up.

We couldn't provide it because we had to negotiate or invest a huge amount of money for Fireblocks which didn't want to talk to us because we were non EVM. So in this case, the Ethereum compatibility which I'm talking about is premised is built as a hypothesis to solve a lot of these issues because when people hear that we're Ethereum compatible and we have the tech glove or tech white glove support service to help them integrate, we can also invest now in all the right projects which are the source of that liquidity. When it comes to users, it really depends on who we're talking about. Do we talk about devs? Do we talk about normies who are using I don't know if we take a look at mythical they have a bunch of users nowadays when it comes to um you know the gamers which are playing their FIFA rivals NFL rivals and so on if we talk about frequency if we talk about the majority of those normies which I mentioned but I assume that users are mostly the core native web3 users which are doing the swaps which are bridging which are doing this and that in the core for web3 principles.

This is by re this is uh we will solve this by rebuilding the or reconsidering defi as the foundational piece to it. One big project to that is hydration. But again with polar hub we'll get much more not just something which is centralized on one infrastructure and one chain in that case and we will make sure that we are interrupting those projects in the right way to kind of you know get the most out of the application first infrastructure instead of just the the different chains which are you know bound to make success by themselves or even competed sometimes. Does it does it help the answer?

Okay, any more questions?

Let's give a big applause to Alex.

Thank you guys.