Polkadot is a next-generation blockchain protocol that enables independent blockchains to communicate and work together seamlessly. Launched on May 26, 2020, Polkadot was created to solve one of blockchain’s biggest challenges: interoperability. The platform allows different blockchains to exchange data and assets without requiring a trusted third party, creating a truly interconnected web of blockchains.
Developed by Parity Technologies and supported by the Web3 Foundation, Polkadot has evolved significantly since its launch. With the rollout of Polkadot 2.0 in 2024-2025 and the upcoming JAM protocol, the network is transforming from a multi-chain ecosystem into what founder Gavin Wood describes as a “decentralized supercomputer.”
Table of contents
- What are Polkadot’s best features?
- Who created Polkadot?
- How does Polkadot work?
- Polkadot 2.0
- JAM: The future of Polkadot
- Why does the Polkadot coin (DOT) have value?
- Staking DOT
- Governance
- The Polkadot ecosystem
- DOT ETF prospects
- Where can you buy Polkadot?
What are Polkadot’s best features?
Most blockchain projects operate in isolation until they establish connections with the broader ecosystem. Building this infrastructure from scratch is complex and expensive, which has caused many promising initiatives to fail. Polkadot’s architecture was designed from the ground up to solve these challenges.
Interoperability
Polkadot’s core innovation is enabling different blockchains to communicate natively. Through its Cross-Consensus Messaging (XCM) protocol, parachains and applications can share data, tokens, and functionality across the network. The latest XCM v5 upgrade has elevated cross-chain communication to new heights, with improved asset transfer predictability.
Shared security
All blockchains connected to Polkadot benefit from the security of the entire network. Instead of each chain needing to bootstrap its own validator set, they inherit security from the Relay Chain’s validators. This pooled security model makes it much easier for new projects to launch with robust protection.
Scalability
By processing transactions across multiple parallel chains simultaneously, Polkadot achieves remarkable throughput. In December 2024, the Kusama network (Polkadot’s canary network) achieved 143,000 transactions per second in stress tests. With all cores active, Polkadot theoretically could reach 500,000-600,000 TPS, and the network is targeting 1 million TPS tests by the end of 2025.
Forkless upgrades
Unlike most blockchains that require hard forks to implement major changes, Polkadot can upgrade seamlessly through its on-chain governance system. This eliminates community splits and ensures the network can evolve continuously without disruption.
Customization
Each parachain can be optimized for specific use cases while remaining connected to the broader network. Whether building for DeFi, gaming, identity, or enterprise applications, developers have full control over their chain’s design.
Who created Polkadot?
Polkadot was created by Dr. Gavin Wood, one of the co-founders of Ethereum and the author of the Ethereum Yellow Paper. After leaving Ethereum, Wood founded Parity Technologies and the Web3 Foundation to realize his vision for a more interconnected and scalable blockchain ecosystem.
The concept for Polkadot emerged in late 2016 when Wood and early Parity team members discussed what a next-generation blockchain protocol should look like. The Polkadot whitepaper was published shortly after, and the first code appeared on GitHub in November 2017.
Development progressed through several milestones: the first parachain was deployed in July 2018, and after extensive testing, Polkadot launched in May 2020. Token transfers were enabled in August 2020, marking the network’s full operational status.
In August 2024, Gavin Wood announced he would resume his role as Parity CEO, signaling renewed focus on delivering Polkadot’s ambitious technical roadmap.
How does Polkadot work?
Polkadot’s architecture consists of several interconnected components working together to create a unified multi-chain ecosystem.
The Relay Chain is the heart of Polkadot. It provides consensus, security, and cross-chain communication for the entire network. The Relay Chain doesn’t support smart contracts directly—instead, it coordinates all the connected chains and ensures they operate securely.
Parachains (parallel chains) are independent blockchains that connect to the Relay Chain. Each parachain can have its own tokens, governance, and functionality optimized for specific use cases. They process transactions independently and submit results to the Relay Chain for validation, enabling massive parallel processing.
Bridges connect Polkadot to external networks like Ethereum and Bitcoin, enabling token transfers and communication without centralized exchanges. The Polkadot-Kusama bridge went live in 2024, enabling seamless DOT and KSM transfers between networks.
XCM (Cross-Consensus Messaging) is the native protocol that allows parachains to send messages and transfer assets to each other securely and efficiently.
Polkadot 2.0
Polkadot 2.0 represents a comprehensive upgrade to the network’s capabilities, rolled out in phases throughout 2024-2025. This upgrade fundamentally changes how developers and projects interact with Polkadot.
Asynchronous Backing
Launched in May 2024, this upgrade reduced parachain block time from 12 seconds to 6 seconds while increasing block space by 5-10x. This enabled parallel validation of transactions and block production, dramatically improving throughput.
Agile Coretime
Launched in September 2024, Agile Coretime replaced the old parachain slot auction system. Instead of bidding for expensive long-term slots, projects can now purchase “coretime” flexibly—buying compute resources on-demand like renting cloud servers. This dramatically lowers the barrier to entry for new projects and improves overall network efficiency.
Elastic Scaling
Rolling out in 2025, Elastic Scaling allows parachains to dynamically allocate block-space resources based on demand. During high-traffic periods, chains can tap into multiple cores for additional capacity, then scale back during quieter times. This ensures optimal resource utilization across the network.
Additional improvements
Polkadot 2.0 also introduced a unified address format that works across Polkadot and all rollups, fast unstaking to reduce DOT unlocking wait times, and DOT as a universal fee token that can be used for gas across all connected chains.
JAM: The future of Polkadot
JAM (Join-Accumulate Machine) is Gavin Wood’s vision for Polkadot’s next evolution, detailed in the Gray Paper released in April 2024. JAM will transform Polkadot from a multi-chain relay network into a decentralized general computing platform—essentially a distributed supercomputer capable of running any kind of Web3 application or service.
The protocol combines elements of both Polkadot and Ethereum into a unified platform, offering a global permissionless computing environment with secure parallel computation. JAM introduces a pay-as-you-go model where anyone can deploy services without the complexity of launching a full parachain.
Development is progressing through multiple phases, with the JAM Gray Paper approaching version 1.0. A prototype called “JAM Toaster” has been built, and the Web3 Foundation has allocated 10 million DOT and 100 thousand KSM to incentivize developers building on the new technology stack. JAM is expected to be ready for deployment around 2026.
Importantly, Gavin Wood has stated that no new JAM token will be issued—DOT remains the core token powering the ecosystem.
Why does the Polkadot coin (DOT) have value?
DOT is the native token of the Polkadot network and serves several essential functions:
Governance
DOT holders have voting power over all protocol changes, treasury spending, and network upgrades through Polkadot’s OpenGov system. This gives the community direct control over the network’s evolution.
Staking
DOT is staked by validators and nominators to secure the network. Validators process transactions and produce blocks, while nominators back validators with their stake. Both earn rewards for their participation.
Coretime purchases
With Agile Coretime, DOT is used to purchase compute resources on the network. Projects pay DOT to access Polkadot’s processing power for their applications.
Universal gas token
DOT now functions as a universal fee token across Polkadot and all connected rollups, simplifying the user experience across the ecosystem.
Staking DOT
Polkadot uses a Nominated Proof of Stake (NPoS) consensus mechanism. Token holders can participate in network security in two ways:
Validators run nodes that produce blocks and validate transactions. Running a validator requires technical expertise and a significant DOT stake.
Nominators back validators they trust with their DOT stake. If their chosen validators perform well, nominators share in the rewards. If validators misbehave, both validators and nominators can lose a portion of their stake through “slashing.”
For smaller holders, nomination pools allow users to pool their DOT together to collectively nominate validators. With over 250 pools and more than 45,000 members, this feature enables participation with as little as 1 DOT. The 2025 staking dashboard upgrade further simplified the experience with a unified wallet system, real-time reward projections, and support for 12 languages.
Staking yields vary based on network conditions and the total amount staked. The network implemented a new inflation model in late 2024 that adjusts based on staking participation.
Governance
Polkadot operates one of the most sophisticated on-chain governance systems in crypto, called OpenGov. Any DOT holder can submit proposals, vote on changes, and participate in decision-making.
The system includes multiple “tracks” for different types of proposals, from small treasury requests to major protocol upgrades. Each track has appropriate voting thresholds and timeframes. This allows routine decisions to pass quickly while ensuring major changes receive thorough community review.
The Polkadot Treasury, funded by transaction fees and inflation, supports ecosystem development. In 2024, the treasury spent $133 million across various initiatives including development, marketing, and business development. According to reports, available funds could support over 10 years of continued operation.
The Polkadot ecosystem
Polkadot hosts a diverse ecosystem of over 200 projects spanning DeFi, gaming, identity, and enterprise applications. Notable parachains include:
- Moonbeam – Ethereum-compatible smart contract platform
- Acala – DeFi hub with stablecoin and liquid staking
- Astar – Multi-chain smart contract platform supporting EVM and WebAssembly
- Phala – Privacy-preserving cloud computing
- Mythos – Gaming-focused chain that migrated from Ethereum
Kusama serves as Polkadot’s “canary network”—a live testing environment where new features are deployed before reaching Polkadot. Projects often launch on Kusama first to battle-test their technology with real economic stakes before deploying to Polkadot.
The Polkadot Hub (launching late 2025) will serve as the ecosystem’s main entry point, integrating identity, governance, applications, and cross-chain bridges into a unified interface.
Polkadot ranks among the top Layer 1 networks for developer activity, with 95 key developers as of early 2025.
DOT ETF prospects
In January 2025, 21Shares filed an S-1 application with the U.S. Securities and Exchange Commission for a spot Polkadot ETF, with Grayscale also expressing interest. If approved, a DOT ETF would allow traditional investors to gain exposure to Polkadot through conventional brokerage accounts.
The Web3 Foundation has worked extensively to demonstrate that DOT does not qualify as a security under U.S. regulations. A decision on the ETF applications is expected in late 2025, and approval could significantly increase institutional investment in the ecosystem.
Where can you buy Polkadot?
Before you can buy DOT, you need a place to store it. You can create a wallet in several ways:
- On a cryptocurrency exchange (Binance, Kraken, etc.)
- Using a browser extension wallet like Talisman or SubWallet
- Through the official Polkadot Vault mobile app (air-gapped security)
- By purchasing a hardware wallet (Ledger or Trezor)
For maximum security and true ownership of your DOT, using a hardware wallet or self-custody solution where you control the private keys is recommended. Remember the saying in crypto: “Not your keys, not your coins.”
Once you have a wallet, you can purchase DOT in several places:
- On a cryptocurrency exchange
- Through a broker or trading platform
- At a cryptocurrency ATM (locations at coinatmradar.com)
- Through a DOT ETF in your brokerage account (pending regulatory approval)
