What is Polkadot?
Polkadot is a blockchain network that has transitioned from a Proof of Authority (PoA) network to a Proof of Stake (PoS) network. It is a sharded, multichain network comprised of a central Relay Chain that unifies the system, and separate parachains that handle various functionalities such as smart contracts, privacy, and scalability. Polkadot aims to have 1000 validators, who are elected to the active set using an election algorithm called Phragmén's method. The GRANDPA (GHOST-based Recursive ANcestor Deriving Prefix Agreement) consensus algorithm is used in the Polkadot network to securely and efficiently finalize blocks on the Relay Chain. GRANDPA uses a recursive process to reach a final agreement on the state of the network, by deriving the prefix of the canonical chain from a set of justifications provided by validators. Justifications are the cryptographic proofs that validators provide to the GRANDPA algorithm to show that they have come to a consensus on a particular block. The prefix refers to the sequence of blocks that form the blockchain up to a certain point in time. As an independent service, validators perform the GRANDPA finality process in parallel with block production. The algorithm works by assigning each validator a weight based on their stake, then iteratively reallocating weight to the validators based on their relative shortfall from their proportional share of the total stake. This process continues until the weights converge to a stable solution, then used to determine the elected validators. The aim of this method is to create a fair and balanced process for the election of validators within the Polkadot network. Validators are rewarded with a percentage of the inflation of the Relay Chain and transaction fees. A slot refers to a designated period of time during which a parachain can be connected to and secured by the Polkadot Relay Chain. Each parachain has a slot that allows it to connect to the Relay Chain for a specific amount of time. The number of slots available on the Relay Chain is limited, and parachains must compete for the slots via an auction process to ensure their connection and security to the network. The use of slots ensures that the Relay Chain can handle multiple parachains at the same time while maintaining the security and efficiency of the network. Parachains can move between being a parachain, a parathread, or a separate sovereign chain, and may lose their slot on the network if they fail to win a new slot in a subsequent auction. Validators, nominators, and collators are the key actors in the Polkadot network who produce blocks, stake bonds to particular validators, collect parachain transactions and produce state transition proofs. Polkadot is interoperable through XCM, short for "Inter-chain messaging format" (previously Cross-chain messaging format), a standardized format for communication between different chains on the Polkadot network. The libp2p networking stack developed by Protocol Labs is utilized within the Polkadot network to enable discovery, routing, and secure communication between nodes or peers within the network. Kusama is a popular canary network of Polkadot that enables experimentation with new features and has its own set of validators, utilizing the native coin KSM.