Polkadot promises to solve the scalability and interoperability issues of the blockchains. As a result, it has attracted scores of ground-breaking projects. It seems that the developers are cooling on Ethereum and are more interested in Polkadot Development. The reason behind this shift of energy is that the Polkadot ecosystem promises to be scalable by enabling independent projects to deploy their independent blockchains called parachains. This setup makes it a cheaper and faster blockchain than Ethereum.
DeFi on Polkadot
DeFi has grabbed all the attention of crypto users, platform developers, and even the investors for the last 2 years. Many projects are now building on Polkadot to give it a slice of DeFi pie.
Polkadot parachains function as separate blockchain but due to Relay Chain at the core, they can communicate with each other and transfer value. Interestingly, Polkadot blockchain development companies are building infrastructures like a stablecoin, DEX (decentralized exchange), and staking liquidity to rope Polkadot into DeFi.
Interestingly, Polkadot promises interoperability which means that whatever happens on a Polkadot parachain can be moved onto Ethereum. To state an example, the user can deposit collateral in the DeFi structure built using Polkadot and receive the native stablecoin of that platform. Then he can send that stablecoin to Ethereum and use an Ethereum DEX to buy an ERC-20 token. Interoperability unlocked!!
Ethereum implementation on Polkadot
Undoubtedly, Ethereum is the first and the biggest platform that offers smart contracts to users. As a result, it becomes very important for the Polkadot ecosystem to complement Ethereum and become interoperable with it.
Recently, many projects that have been developed act as EVM-compatible smart contract parachain on Polkadot. Effectively, they offer an experience that is pretty much similar to Ethereum. This is important because the Ethereum network has remained congested for a long time now. Due to the rising gas fee and scalability issues, developers and users are looking for alternate blockchains which in turn has a fragmented market.
The projects that help with the implementation of Ethereum on Polkadot help solve this problem of fragmentation. Polkadot blockchain development provides dApp developers an ideal platform that is Ethereum compatible and has a bridge that connects Ethereum and this platform. Because of the strong Ethereum compatibility, the developers can use the existing Ethereum ecosystem tools e.g., Metamask to build dApps. The biggest advantage is that all this while the users can also access Polkadot’s on-chain governance, cross-chain integration, and more.
Smart contract platform on Polkadot
Polkadot blockchain development offers its Substrate framework to support smart contracts. These smart contract platforms on Polkadot are being integrated with Ethereum Virtual Machine, the dApp platform. This enables users to easily deploy smart contracts written in Solidity on Polkadot.
As Polkadot development supports interoperability, it makes complete sense to build cross-chain identity projects on top of it. Using aggregated cross-chain identity, the projects could use the identity’s quantified data to offer graded services.
The Polkadot ecosystem is developing at a rapid speed. But without bridges to blockchains like Bitcoin and Ethereum, it will turn out to be another blockchain functioning in silos. Currently, many projects are building cross-chain bridges, DeFi products, and infrastructures on Polkadot.
Will Polkadot kill Ethereum?
As an entrepreneur who is thinking of building a dApp or a DeFi product, you might be finding it difficult to choose between Polkadot and Ethereum. With Ethereum 2.0 roll-outs happening, the dilemma must be growing every passing day.
While many developers out there believe Polkadot might kill Ethereum, the fact is that Polkadot and Ethereum will likely complement each other. Also, it cannot be ignored that Ethereum has a critical advantage over all of these and that is a long-established and very large developer base. Thus, the products that bridge these ecosystems or enable compatibility for different services are very important and will have long-term sustenance.
Wrapping it up
Polkadot Development is rapidly picking pace. However, even the brightest idea might not turn out to be successful if the product development is not carried out in the right way.
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