Polkadot Development Strategy Report

Introduction

Hello to all friends interested in Polkadot, we are a team focused on researching opportunities and prospects in Polkadot and its ecosystem, and we have consecutively received support from the Polkadot Treasury six times.

As a team that has been researching Polkadot for nearly five years, we have heard increasing voices of frustration within the community recently, with many people seeing no hope and even leaving the Polkadot ecosystem, which is something we do not want to see. With the recent launch of OpenGov on Polkadot, we see that governance power is increasingly being handed over to the community, and we can become a driving force for the development of Polkadot. Therefore, we decided to shift from a previously passive research role to an active participation role. This article is a Polkadot growth strategy planning report that we believe outlines how Polkadot should grow, with many viewpoints being the result of our years of research.

This article will directly address the market rather than just the technology and ideals. We will face the most real issues head-on and propose improvement ideas and suggestions. Of course, we also see that many teams are actively proposing solutions to some current problems of Polkadot in the official forums and communities. However, these solutions are often singularly targeted at a specific problem, lacking a comprehensive approach from a broader perspective, or a unified resolution of multiple issues under a strategic framework.

We welcome everyone to point out the shortcomings in this article, and we also welcome any constructive suggestions for practical modifications. 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 outlined in its Roadmap. The launch of OpenGov introduced an advanced governance model, providing community members with broader participation and decision-making power; 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 increased, currently ranking first among public chains, with the total number of developers rising to second place. This indicates that the number of developers attracted by Polkadot is continuously growing, and their contributions to its technological ecosystem are also steadily increasing.

However, despite the remarkable progress, Polkadot still faces some challenges. The price of the DOT token is volatile, which may bring a certain level of uncertainty to investors and ecosystem builders. At the same time, user activity has declined, the development of ecosystem projects is sluggish, and there are some urgent governance issues within the treasury that need to be addressed.

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

Technical Update Status

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

OpenGov: A new governance model introduced by Polkadot, achieving decentralization through community voting and checks and balances, adopting a structured implementation lifecycle. The Technical Fellowship has replaced the old technical committee and acts as a developer DAO.

XCM V3: As the latest version of the cross-consensus messaging format, XCM has been initiated for application through governance on a certain network. The release of XCM V3 brings innovative design, supporting features such as external network bridging, NFT transfer, 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 agreement across multiple chains, where chains will voluntarily comply with the agreement and ensure its faithful execution. In the process of realizing Accord, Polkadot introduced two key technologies: SPREE and Project CAPI.
• SPREE Technology: Runtime logic fragments based on a relay chain, functioning like a secure tunnel, ensure 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 reaffirms its commitment to building a resilient application platform. Polkadot will focus on constructing a ZK primitive library, with the first library nearing completion, which will provide privacy protection for on-chain collectives. Polkadot will also invest in updates for several technologies, including Hermit Relay, Smoldot light clients, Sassafras consensus, and Internode Mixnet.

In addition, technologies such as parallel threads, system parallel chains, and asynchronous support developed by a certain team are also being fully supported and are pending implementation.

On-chain situation

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

Development activity status:

• The participation of Polkadot and developers from a certain test network has maintained a good upward 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 has 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:

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

Total Value Locked (TVL) in Parachain:

• In the Polkadot ecosystem, the top 6 parachains focused on DeFi dominate.
• The total locked value of the parallel chain experienced a downward trend after a period of increase in the second quarter, dropping 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 is 46%, lower than the ideal staking rate.
• The current return rate is approximately 9%, but it varies with changes in the staking rate.

Developer Information

According to data released by a certain organization, in the first half of 2023, Polkadot has a large developer base in the industry. 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 1,923, rising from third to second place, and has maintained a relatively stable ratio compared to last year, with full-time developers accounting for approximately 33.54% of the total. This data indicates that Polkadot's developer community is continually expanding and plays an important role in the development of the Polkadot ecosystem.

Ecological Situation

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

According to statistics from a certain website, there are currently 580 ecological applications related to Polkadot, including DeFi, infrastructure, NFTs, browsers, wallets, forums, etc., developed based on a certain framework.

On June 15, the launch of XCM V3 attracted widespread attention, offering advanced programmability, bridging capabilities with external networks, cross-chain locking, improved fee payment mechanisms, and support for non-fungible tokens (NFTs). In terms of total value locked (TVL) in parachains, two particular projects have the highest number of active accounts, while one project has consistently been the leader in TVL, and several other parachains also maintain a high level of TVL.

Slot auctions are the process of allocating access to the relay chain, with winners obtaining the rights to operate a parachain. In addition, Polkadot ecosystem projects are attracting increasing attention and collaboration, with some projects also making significant progress.

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

Market Capitalization Status

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

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

The migration of stablecoins to a certain type of solution has become a major highlight of 2023, such as a certain project. This project is one of the best performers in 2023, with an increase of up to 227% at the beginning of the year, and its current market value is approximately 1 billion US dollars.

A certain project is another highly regarded solution, with a trading volume exceeding 1.7 billion dollars and a current market cap of 1 billion dollars.

social media situation

The official media of Polkadot currently includes the Polkadot official website, a test network, Polkadot Twitter, a 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 other aspects; social media platforms like Twitter, Reddit, and Medium are used to publish the latest Polkadot updates and important events, facilitate community communication, and expand influence; YouTube offers video resources such as speeches, technical sharing, and community activities from the Polkadot team, helping users to better understand the Polkadot ecosystem.

In addition, there are discussions on technology and the future of Polkadot at the Polkadot forum, on platforms like Polkadot GitHub, and the Polkadot support knowledge base (a certain support library) 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.

Treasury Governance Situation

OpenGov is a new governance system introduced by Polkadot, launched on a test 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 improves the operational efficiency of the governance system, allowing for parallel handling of public votes. With a large number of public votes, it greatly enhances governance efficiency.

Currently, there are several issues with OpenGov governance:

The difference in voter turnout is significant: there are noticeable differences in voter turnout for referendums across different tracks, especially for tracks related to treasury expenditures, which tend to have lower voter turnout. This may lead to some treasury funds being spent without adequate attention from the community, with some of these expenditures possibly being un...