Analysis of Polkadot: Architecture, Internals, and Contradictions

Abstract

Polkadot is a network protocol launched in 2020 with the ambition of unlocking the full potential of blockchain technologies. Its novel multi-chain protocol allows arbitrary data to be transferred across heterogeneous blockchains, enabling the implementation of a wide range of novel use cases. The Polka-dot architecture is based on the principles of sharding, which promises to solve scalability and interoperability shortcomings that encumber many existing blockchain-based systems. Lured by these impressive features, investors immediately appreciated the Polkadot project, which is firmly ranked among the top 10 cryptocurrencies by capitalization (around 10 Billions USD). However, Polkadot has not received the same level of attention from academia that other proposals in the crypto domain have received so far, like Bitcoin, Ethereum, and Algorand, to cite a few. Polkadot architecture is described and discussed only in the grey literature, and very little is known about its internals. In this paper, we provide the first systematic study on the Polka-dot environment, detailing its protocols, governance, and economic model. Then, we identify several limitations-supported by an empirical analysis of its ledger-that could severely affect the scalability and overall security of the network. Finally, based on our analysis, we provide future directions to inspire researchers to investigate further the Polkadot ecosystem and its pitfalls in terms of performance, security, and network aspects.