> For the complete documentation index, see [llms.txt](https://canopy-network.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://canopy-network.gitbook.io/docs/canopy-network/why-canopy/comparables/polkadot.md).

# Polkadot

### What is Polkadot?

Polkadot aspires to tackle the limitations of the existing systems by offering an interoperable, multi-chain, shared security model. At its core, Polkadot maintains a PoS **Relay Chain** (Security Root) that connects to various **Parachains** (Nested Chains), enabling them to operate semi-independently while using security from the validator set of the Security Root. 

Similar to Ethereum, the Parachain’s app code is uploaded to the Relay Chain so validators may be able to validate the Parachain blocks, but like Tendermint, the Parachain maintains its own transaction and block database. This design is **very similar to Rollups** - reduces the scalability bottlenecks associated with monolithic blockchain architectures, like Ethereum’s, where all transactions must be stored by a single chain. 

In addition to enhanced scalability, Polkadot enables cross-chain communication and governance within the Polkadot ecosystem, creating a uniquely intertwined community.

### How does it work?

1. Builders use Substrate: a Polkadot blockchain framework, to create a Polkadot-compatible blockchain (Parachain).
2. Builders then bid for a Parachain slot through an auction process that requires them to stake amounts of DOT upfront. The **highest bidders** win the slot for a certain lease period. **They must re-bid when the lease is up.**
3. Builders then compile their state machine into Web Assembly and upload the state machine to the Security Root so that Validators may verify their state changes. Any upgrade to the state machine must be carefully coordinated on both layers to prevent consensus issues.
4. Builders then **must have Parachain Validators** to validate blocks and participate in the relay chain's consensus process.

### Pros & Cons of Polkadot's Parachains

**The good:**

* ✅ have immediate security
* ✅ have access to Polkadot's ecosystem and tooling

**The bad:**

* ❌ high economic barriers with the bid process
* ❌ relies on the host for governance
* ❌ slow to market (semi-accelerated by the SDK)
* ❌ must keep up with SDK updates
* ❌ highly complex - multi-chain architecture
* ❌ relies on the host for historical finality
* ❌ attract experienced parachain Validators to avoid centralization
* ❌ must build interoperability features to avoid community isolation
* ❌ SDK is complex and intimidating for the new developer

### <mark style="color:blue;">Canopy & Polkadot's Comparison</mark>

<table><thead><tr><th width="201.2000732421875">_</th><th>CANOPY</th><th>POLKADOT</th></tr></thead><tbody><tr><td><strong>Architecture</strong></td><td>✅ Peer-to-Peer</td><td>❌ Centralized around the Relay Chain</td></tr><tr><td><strong>Scaling Method</strong></td><td>✅ Every new chain horizontally scales Web3</td><td>❌ Limited by the Relay Chain</td></tr><tr><td><strong>Builder Sovereignty</strong></td><td>✅ Progressive</td><td>❌ Critical, lifelong reliance on host for security &#x26; finality </td></tr><tr><td><strong>Ecosystem</strong></td><td> ❌ New</td><td>❌ Small</td></tr><tr><td><strong>Long range attack</strong></td><td>✅ Proof of Age</td><td>➖ Centralized checkpoints</td></tr><tr><td><strong>Builder Difficulty</strong></td><td>✅ Quick to market</td><td>❌ Slow to market</td></tr><tr><td><strong>Builder</strong> <strong>Economic Security</strong></td><td>✅ Immediate</td><td>✅ Immediate</td></tr><tr><td><strong>Builder Framework</strong></td><td>➖ Fork &#x26; Clone: Golang</td><td>❌ Complex with WASM</td></tr><tr><td><strong>Chain Resources</strong></td><td>✅ Exponential: Each new chain is additive</td><td>❌ Limited by the Relay Chain</td></tr><tr><td><strong>Builder Success</strong></td><td>✅ L0 Premium</td><td>❌ Typically lower FDV than sovereign L1s</td></tr><tr><td><strong>Native Interoperability</strong></td><td>✅ Permissionless</td><td>➖ Inner-Ecosystem only</td></tr><tr><td><strong>Builder Decentralization</strong></td><td>✅ Full/Progressive</td><td>❌ Semi</td></tr></tbody></table>