Polkadot Rise Strategy Planning Report

Introduction

Hello, friends who are concerned about Polkadot. We are a team focused on researching Polkadot and the development opportunities and prospects within the Polkadot ecosystem, and we have received support from the Polkadot treasury six times in a row.

As a team that has been researching Polkadot for nearly five years, we have heard more and more voices of frustration within the community regarding Polkadot recently. Many people see no hope and have even left the Polkadot ecosystem, which is something we do not want to see. However, with the recent launch of OpenGov on Polkadot, we see that governance power is increasingly being handed over to the community, allowing us to become a force driving the development of Polkadot. Therefore, we have decided to shift from a previously passive research role to an active participation role. This article is a Polkadot growth strategic planning report that outlines how we believe Polkadot should rise, and many of the views within it are the results of our years of research.

This article will directly address the market rather than just technology and ideals. We confront the most real issues head-on and propose ideas and suggestions for improvement. Of course, we also see that many teams are actively proposing solutions to some of Polkadot's current issues in the official forums and communities. However, often these solutions are singularly focused on a specific problem, without a comprehensive approach to address them from a broader perspective, or solving multiple problems uniformly under a strategic thought system.

We welcome everyone to point out the shortcomings in this article, and we also welcome you to generously share your insights, providing practical suggestions for improvement as much as possible. Our only hope is to make Polkadot better, so let's work together.

The Current Status of Polkadot

In the past six months, Polkadot has made significant progress, successfully achieving two important milestones in its Roadmap. Among them, the launch of OpenGov introduced an advanced governance model, providing community members with broader participation and decision-making powers; the release of XCM V3 improved the messaging format, enhancing Polkadot's functionality and interoperability, laying a solid foundation for future development.

The infrastructure construction of the Polkadot network remains strong, and the level of developer activity has significantly risen, currently ranking first among public chains, with the total number of developers also rising to second place. This signifies that the number of developers attracted to Polkadot is continuously increasing, and their contributions to its technical ecosystem are also on the rise.

However, despite achieving remarkable progress, Polkadot still faces some dilemmas. The price trend of DOT is unstable and has significant fluctuations, which may bring certain uncertainties to investors and ecosystem builders. At the same time, user activity has declined, the development of ecosystem projects is sluggish, and there are some pressing issues in treasury governance that need to be addressed.

Overall, Polkadot is on a path of continuous progress filled with innovation, but it has also faced challenges.

1. Technology Update Status

Polkadot has been committed to continuously improving its technology and features. In the first half of this year, Polkadot has implemented two significant technical updates, releasing OpenGov and XCM V3 on June 15. Currently, Polkadot has announced that it has officially completed version 1.0, and at Polkadot Decoded 2023 at the end of June, Dr. Gavin presented the vision for Polkadot 2.0.

OpenGov: A new governance model introduced by Polkadot that achieves decentralization through community voting and checks and balances. It adopts a structured implementation lifecycle, with the Technical Fellowship replacing the old technical committee and acting as the developer DAO.

XCM V3: As the latest version of the cross-consensus messaging format, XCM has been launched for application on Kusama through governance. The release of XCM V3 brings innovative designs, supporting features such as external network bridging, NFT transfers, and asset locking.

With the complete delivery of Polkadot 1.0, Polkadot will enter a new stage of development. Polkadot 2.0 is a multi-core computer that will shift from a chain-centric to an application-centric approach, introducing several brand new concepts and technologies.

• Accord: A voluntary treaty across multiple chains, where chains voluntarily comply with the treaty and ensure its faithful execution. In the process of achieving Accord, Polkadot introduced two key technologies: SPREE and Project CAPI.
• SPREE Technology: Runtime logical fragments based on relay chains act like a secure tunnel, ensuring that information and value can be safely transmitted between different parallel chains.
• Project CAPI: A middleware project aimed at promoting the development of decentralized applications (DApps) based on Polkadot. It provides developers with a lightweight client solution, enabling them to create cross-chain applications with a good user interface.

In the vision of Polkadot 2.0, Polkadot reiterates its commitment to building a resilient application platform. Polkadot will focus on constructing a library of ZK primitives, and currently, the first library is about to be completed, which will provide privacy protection for the on-chain fellowship. Polkadot will also invest in the updates of several technologies including Hermit Relay, Smoldot light client, Sassafras consensus, and Internode Mixnet.

In addition, technologies such as parallel threads developed by Parity, system parallel chains, and asynchronous support are also being fully supported and are yet to be implemented.

2. On-chain situation

As of the writing of this article, according to Messari's report on Polkadot for the second quarter of 2023, Polkadot's on-chain progress has experienced some ups and downs. Below is a brief overview of Polkadot's on-chain situation for the second quarter.

Development activity status:

• The developer participation of Polkadot and Kusama has maintained a good rise trend, reaching peak active developers of 613.71 and 600.29 on May 28 and June 16, respectively.
• The number of core active developers reached a historic high of 181 on March 22 and remained relatively stable.
• Polkadot has the highest number of submissions in terms of protocols and ecosystems, as well as the most active developers, ranking first.

User activity and financial status:

• In the second quarter, the daily active accounts of Polkadot decreased from 6,290 in the first quarter to the current 5,810.
• The revenue from Polkadot in the second quarter declined from over $120,000 to nearly $81,000.

Total Value Locked (TVL) in Parachain:

• In the Polkadot ecosystem, the top six DeFi-focused parachains, Moonbeam, Astar, Parallel, Acala, Moonriver, and Karura, dominate.
• The total locked value of parallel chains experienced a downward trend after a rise in the second quarter, falling from a peak of $236.12 million on April 14 to $146.77 million on June 30.

DOT staking rate and return rate:

• The staking rate of DOT in the second quarter of 2023 was 46%, which is lower than the ideal staking rate.
• The current return rate is approximately 9%, but it varies with changes in the staking rate.

3. Developer Situation

According to data released by Electric Capital, Polkadot has a large developer base in the industry in the first half of 2023. As of September 17, Polkadot currently has 645 full-time developers, ranking second in the number of full-time developers; the total number of developers is 1923, rising from third to second place, and it has maintained a relatively stable proportion compared to last year, with full-time developers accounting for about 33.54% of the total. This data indicates that the developer community of Polkadot is continuously expanding and plays an important role in the development of the Polkadot ecosystem.

4. Ecological Situation

The Polkadot ecosystem is a rapidly growing and diverse blockchain ecosystem aimed at providing cross-chain interoperability and innovative solutions.

According to PolkaProject statistics, there are currently 580 ecosystem applications related to Polkadot, including DeFi, infrastructure, NFTs, browsers, wallets, forums, etc., developed based on Substrate.

On June 15, the launch of XCM V3 attracted widespread attention, offering advanced programmability, bridging functionality with external networks, cross-chain locking, improved fee payment mechanisms, and support for non-fungible tokens (NFTs). In terms of the total value locked (TVL) in parachains, Moonbeam and Nodle are the two projects with the highest number of active accounts, with Moonbeam consistently being the leader in TVL, while the TVL of parachains such as Acala, Astar, and Parallel also remains at a high level.

Slot auctions are the process of allocating access to the relay chain, where the winners will gain the rights to operate a parachain. Additionally, the Polkadot ecosystem projects are attracting more and more attention and collaboration, with significant progress made by projects such as Mythical Games, Kilt, Frequency, Composable Finance, and Aventus Network.

Overall, the Polkadot ecosystem is continuously growing and developing, the Roadmap is progressing smoothly, and several key projects have been successfully implemented.

5, Market Capitalization Status

As of the current date (October 11), Polkadot's market capitalization is approximately $3.375 billion, ranking 14th in the Crypto market. In the past few months, it has shown a downward trend, with prices remaining relatively stable from early May to mid-June. Overall, the price of DOT has decreased by 31.87% in recent months.

Polkadot and Cosmos are both committed to solving the problem of cross-chain communication, but they have taken different technical routes. Compared to Cosmos, the price of ATOM is currently in a relatively low state, having dropped about 27.42% so far this year (except for a brief rebound in June). However, overall, Cosmos's market capitalization performance has declined, with a current market cap of approximately $2.598 billion.

The migration of stablecoins to Layer 2 solutions has become a major highlight of 2023, such as Optimism. OP is one of the best-performing Crypto projects in 2023, with a rise of up to 227% at the beginning of the year, and Optimism now has a market capitalization of approximately 1 billion USD.

Arbitrum (ARB) is another highly regarded Layer 2 solution, with a trading volume exceeding $1.7 billion and a current market capitalization of $1 billion.

6. Social Media Situation

Polkadot's official media mainly includes the Polkadot official website, Kusama network, Polkadot Twitter, Web3 Foundation Twitter, Reddit, YouTube, and other channels. The official website provides detailed information about the Polkadot project, including technical documents, news updates, community governance, ecosystem development, and more; social media platforms like Twitter, Reddit, and Medium are used to publish the latest Polkadot updates and important events, communicate with the community, and expand influence; YouTube provides video resources such as speeches by the Polkadot team, technical sharing, community activities, etc., to help users better understand the Polkadot ecosystem.

In addition, there are discussions on technology and the future of Polkadot at the Polkadot Forum, platforms like Polkadot GitHub, and the Polkadot Support Knowledgebase, which provides tutorial support and assistance for Polkadot. Overall, Polkadot's official social media is quite rich, offering users various forms of participation and communication, which is very important for strengthening community consensus and expanding influence.

7. National Treasury Governance Situation

OpenGov is a new governance system introduced by Polkadot, launched on the Kusama network in November 2022. It has significant advantages in improving governance efficiency and promoting community participation. However, OpenGov also faces some challenges, such as uneven voting rates and rapid treasury spending.

Efficient governance handling: Compared to the original governance system Gov1, OpenGov has improved the operational efficiency of the governance system, allowing for parallel processing of referendums, with a large number of referendums significantly enhancing governance efficiency.

Currently, there are several issues with OpenGov governance:

voter turnout