Polkadot is a network that connects blockchains—a scalable heterogeneous multi-chain. Polkadot enables new designs of blockchains to communicate and pool their security while allowing them to maintain entirely arbitrary state-transition functions.
Polkadot—a scalable heterogeneous multi-chain that connects blockchains—enables new blockchains to communicate in a secure environment. In order to solve the scalability and interoperability challenges facing many blockchains, Polkadot creates a sharded ecosystem that includes a main relay chain and individual parachains (shards).
The relay chain is responsible for achieving consensus and transaction delivery (message passing) among parachains. Parachains—or “parallelized blockchains”—are application-specific blockchains within the Polkadot network. Each parachain is an entire blockchain in and of itself, with its own logic and features. Parachains also share software and security with the other parachains. The main relay chain connects these parachains by sharing state and validation logic to provide a secure environment for trust-free message passing. This shared security model across chains represents a big draw for developers to work with the Polkadot ecosystem.
Early testing suggests that Polkadot, when multi-threading and parachains are included, could reach as high as 1,000,000 transactions per second.
Substrate is the modular blockchain framework on which most parachains will be built; it is the foundation for the whole Polkadot ecosystem. It allows developers to quickly build and launch a blockchain with a variety of feature options available for a wide range of project needs. These options include WebAssembly smart contracts, multi-level permissioning, encrypted transactions and state, account-level locking, and governance tools. Substrate-based protocols can easily interact with Polkadot allowing them to become parachains in the system and share security.
Polkadot uses Nominated Proof of Stake (NPoS) as its consensus method. There is a known and limited number of validators in the active set and this active set number is decided by governance. Inclusion in the active set is determined by your total self-bonded and delegated stake. The minimum stake to get in the active set varies daily and depends upon the number of validators attempting to be included and the amount of stake on each. In a NPoS system, each elected validator has equal say in consensus.
Once included in the active set, every validator has equal voting powers and gets equal rewards. For example, if there are two validators, one with 15k DOTs and another with 100k DOTs, assuming both are in the active set, they will receive equal rewards on an annual basis.
Because of this equitable distribution of rewards, it is preferable for a DOT holder to distribute their stake and run multiple validators. Optimizing your participation on Polkadot, or any NPoS network, requires more active management than other PoS networks.
There is no minimum self-bond to run a validator. It is possible to meet the minimum stake necessary to be elected to the active set with almost 100% nominated DOTs. The goal is to get in the active set without being significantly higher than the minimum. As such, many validators maintain a low self-bond and delegate to themselves with the majority of their DOTs from a separate account. This set up allows them to remain flexible and distribute their stake as the minimum for election to the active set changes.
Every validator in the active set receives the same amount of DOTs for equal work. They then take a validator fee (a percentage commission) before distributing the remaining rewards to their nominators (delegators to the validator) and the validator’s self-bonded stake on a pro-rata basis. All rewards are distributed automatically on-chain.
Validators can be slashed for misbehavior (e.g. being offline, equivocation). The slashed amount is a fixed percentage. A validator with more stake gets slashed more total DOTs. Since rewards are evenly distributed among validators elected to the consensus group, there is no economic advantage in staking more DOTs than required to be in the active set. In fact, staking excess DOTs increases the loss in the event of slashing.
In general, Polkadot slashing is based on security threat levels:
|Threat Level||Slashable Behavior||Max % Slashed|
|Level 1||Low security threats such as isolated cases of unresponsiveness||0.1% (or kicking the validator out of the active set)|
|Level 2||Misconduct that occurs in good faith but is due to bad practices||1%|
|Level 3||Misconduct unlikely to happen in good faith or by accident, but does not lead to serious security risks or resource use||10%|
|Level 4||Misconduct that a) poses a serious security risk to the system, b) shows large levels of collusion among validators, and/or c) forces the system to spend a large amount of resources to deal with them||100%|
The two key misbehaviors are unresponsiveness and equivocation which escalate slashing amounts based on the percentage of total validators participating in the behavior at the same time, called correlated slashing risk. For example, if 25 out 200 validators are down, the slashing penalty is less than half a percent, but if 50 out of 200 are down, the slashing penalty is over 3%. Penalties for equivocation are more severe than unresponsiveness due to the increased harm to the network.
A controller is a 1-to-1 proxy for your stash (where your tokens live). It acts on behalf of the DOTs in your stash to nominate validators and participate in consensus, without being able to access your funds. Using a controller allows you to participate in staking and securing the network without accessing the stash account that controls the custody and movement of your funds.
Setting your stash as the controller is risky and not advisable. Controllers on Polkadot allow you to manage your nominations while keeping your stash account offline. Using a Bison Trails managed controller provides those benefits of additional security with additional ease of use, while still ensuring you maintain full custody of your assets.
Read more about Managed Controllers in our guide.
By design, Polkadot requires more active node management than PoS networks. We make it easy for anyone to run reliable, automated, and decentralized Polkadot validating nodes that strengthen and secure the network.
Bison Trails is uniquely positioned to provide unparalleled enterprise-grade node infrastructure for Polkadot validators:
Our first edition of the most important developments in the Substrate Ecosystem curated by Elias Simos, Protocol Specialist at Bison Trails
Bison Trails enables ZKValidator to run a community-focused Staking as a Service to promote privacy research and participate in governance on emerging PoS networks
In June, Bison Trails and Web3 Foundation teamed up for an in-depth conversation on Substrate, Polkadot’s parachains, and scaling infrastructure. The conversation ranged from learnings on Kusama to the intricacies of optimizing infrastructure for Nominated Proof of Stake networks.
Bison Trails’ managed controllers allow large-scale DOT holders to run validators on the Bison Trails platform or delegate to our staking-as-a-service nodes to easily manage Polkadot delegation as network dynamics change.
An overview of validator rewards and how Polkadot token holders are incentivized to participate in the earliest days of the network
This integration combines Coinbase Custody’s institutional-grade offline storage solution with the Bison Trails infrastructure platform, allowing Coinbase Custody clients to seamlessly stake their DOT to Bison Trails’ validators.
We’re very excited to announce Bison Trails will support Polkadot at launch and we’ll continue to support node operators on Kusama!