Web3 is another evolution of the current Internet, and it has also brought many changes and influences. As an important role in Web3, Polkadot’s technical updates and important processes are often closely related to the development of the Web3 industry, so this issue is launched [ Polkadot Events] column provides an interpretation of Polkadot’s latest developments and trends to help everyone grasp Polkadot’s development trends.
Preface
Since more and more traditional funds have entered the Crypto industry, the Crypto industry has been highly related to traditional finance. In early 2024, the U.S. Securities and Exchange Commission (SEC) approved the BTC ETF, and the Crypto market has ushered in a wave of growth. At the same time, the next BTC halving event is approaching, which has had a positive impact on the market, and the entire Web3 industry has shown strong recovery momentum.
Whether it is the clichéd fields of DeFi and GameFi, or the currently hot AI and DePIN tracks, all sectors have shown a flourishing scene. According to data from CoinMarketCap, the total market value of Crypto assets has increased by more than 50% in just three months from January this year to now.
As an important member of the industry, Polkadot Network has played an important role in promoting the development of the industry with its Layer0+Layer1 multi-chain ecosystem, which has various parallel chains and applications.
By combining Layer0 and Layer1, Polkadot builds a flexible and efficient multi-chain ecosystem. Layer0 provides cross-chain communication and security guarantees, while Layer1 supports the deployment and application development of various parallel chains. This combination enables Polkadot to achieve a high degree of scalability and interoperability, providing users with a broader range of application scenarios.
In addition to the original unique multi-chain architecture, the upcoming Polkadot 2.0 will allow Polkadot to focus on the lower-level resources required by the blockchain - Core, and will provide more flexible, short-term, and The market-oriented resource allocation method is expected to further promote the vigorous development of the Polkadot ecosystem and even the entire Web3 industry.
Several major directions worth looking forward to for Polkadot
1、DeFi
At present, the DeFi sector of the Polkadot ecosystem is still in its early stages, and the TVL of the entire project has not yet been developed. However, Polkadot naturally has billions of dollars in Staking assets, and the release of liquidity from these assets will promote the further development of DeFi. From this point of view, Polkadot’s DeFi has huge growth potential and is well worth exploring.
A typical example is Bifrost, a DeFi project that aims to provide liquidity for staking assets.
According to its latest annual report, Bifrost's TVL grew significantly in 2023, growing from $43.5 million to $110 million, an increase of more than 150%. According to DeFillama data, we can see that Bifrost’s TVL has experienced explosive growth this year and hit a new high on March 14.
HydraDX, another DeFi project on Polkadot, originally focused on providing decentralized financial services. Recently, the project has undergone a major development direction adjustment and rebranding.
First, the HydraDX team is developing a new decentralized stablecoin HOLLAR, aiming to maintain exchange rate stability through an innovative clearing and liquidity framework; secondly, HydraDX is about to launch a digital asset lending platform, which plans to deploy the AAVE v3 fork on the HydraDX EVM to achieve a seamless user experience; finally, considering future development, HydraDX is about to launch a new identification system and plans to change its name to the Hydration network.
These changes mark HydraDX’s transformation from an original liquidity solution provider to a more diversified and comprehensive DeFi ecological participant. Rebranding is not only an update of the external image, but also a comprehensive improvement of the project's intrinsic value and development philosophy. With the implementation of these changes, HydraDX is expected to play an even more important role in the Polkadot ecosystem.
Although the DeFi development of the Polkadot ecosystem is still in its early stages, the technology behind it and the potential asset scale indicate that as the ecosystem matures and projects increase, Polkadot DeFi is still expected to shine.
2、DePIN
DePIN (decentralized physical infrastructure network) is also a track that is attracting much attention at the moment.
Arweave, as an old decentralized storage project, recently introduced the new narrative of AO (Arweave Oracle). Described as a hyper-parallel computer capable of running any number of processes in parallel at the same time, AO will also empower Arweave smart contracts, similar to Ethereum’s “supercomputer” concept. The founder of Arweave claimed that Arweave AO is confident in competing with Ethereum, calling itself an “Ethereum competitor.”
SSV has also recently expanded the DePIN narrative. SSV (Secret Shared Validators) is an important part of the Ethereum pledge protocol, which realizes the decentralization of validators through distributed verification technology (DVT). Recently, SSV has promoted a new narrative of DePIN+Restaking.
DePIN+Restaking combines the concept of a decentralized physical infrastructure network and the re-staking mechanism, aiming to encourage users to share resources, such as storage space, network traffic, cloud computing capabilities and energy, etc., through a token incentive mechanism to jointly build and maintain Network infrastructure. This new narrative may become the new focus of SSV’s ecological future.
Helium, a wireless communication network based on blockchain technology, also recently launched a new sub-project, Helium Mobile. Helium Mobile, nicknamed "American Mobile" by netizens, combines decentralized "mini base stations" with a nationwide 5G network to provide unlimited data, text and calling services for only $20 per month. It is considered A major breakthrough in the field of mobile communications in the United States.
There are also outstanding DePIN projects in the Polkadot ecosystem. CESS (Cumulus Encrypted Storage System) is a decentralized cloud storage network developed based on the Substrate framework. It not only comes with its own EVM and can run smart contracts, but also has a built-in CDN (content distribution network) function, which was demonstrated in the early stages of design. It has many advantages over established projects such as Arweave.
Compared with AO launched by Arweave, CESS takes advantage of the high scalability and flexibility of the Substrate framework to provide users with richer features. The use of the Substrate framework enables CESS to easily interact and be compatible with other projects in the Polkadot ecosystem, which provides CESS with strong competitiveness in the field of decentralized storage in the Web3 era. Especially in supporting commercial-level applications and meeting enterprise-level storage needs, CESS has demonstrated its unique value and potential.
From storage solutions to communication networks to the emergence of new narratives, DePIN’s application scope is expanding and its influence continues to grow, bringing positive effects to the entire blockchain ecosystem.
3、AI
Since the advent of ChatGPT, the development of global artificial intelligence (AI) has ushered in a period of acceleration. The three major elements of AI—data, computing power, and algorithms—have become the core driving force for progress in this field. Data is the basis for AI learning and evolution, computing power provides the necessary computing resources, and algorithms are the key to intelligent decision-making. These elements not only promote the development of AI technology, but also bring new opportunities to the Crypto industry.
In terms of network infrastructure, the needs of AI are highly consistent with DePIN’s philosophy. For example, activities such as AI model training and distributed machine learning require powerful computing power and large amounts of data, and DePIN can effectively support these needs.
In the field of Web2, major technology giants have also announced good news about AI. Microsoft and Google, for example, are actively promoting the application and development of AI technology. These initiatives not only promote the application of AI technology in the traditional Internet field, but also have a positive impact on the AI sector of Web3. There is no doubt that the direction of AI has become the top priority in the Web3 field.
As an open and diverse multi-chain ecosystem, AI-related projects are naturally inevitable in Polkadot. One of the noteworthy projects is Bittensor.
Bittensor is an open source protocol based on Polkadot that aims to create a decentralized AI market. Through the blockchain network and incentive mechanism, Bittensor allows different algorithms to be scheduled and screened, thereby promoting free competition and knowledge sharing in the AI field. The innovative subnet mechanism makes it known as the "Ethereum of AI" by the community.
Since the beginning of the year, the popularity of projects with AI concepts has only increased, and the emergence of Vincent’s video model Sora has set off the whole scene. As of the end of February, Bittensor’s market value was close to US$4 billion, making it the project with the highest market value in the AI sector in Web3.
Another project worthy of attention in the AI sector is Phala Network.
Phala Network is a decentralized off-chain computing infrastructure that utilizes Trusted Execution Environment (TEE) technology to achieve confidential computing and secure transmission of data. Last year, Phala launched Phat Contract on the mainnet, which is an off-chain programming model that runs on the Phala Network, allowing developers to easily write and deploy on the Phala Network with full-chain compatibility, Internet access, and verifiability Computing DApps.
Among the many application scenarios of Phat Contract, Web3AI is one of the most important directions. Using TEE technology, Phala runs AI algorithms in a secure execution environment to ensure that data during the calculation process is protected from external attacks and leaks. In addition, it allows participants in AI model training to share and utilize idle computing resources on the network without the need to purchase and maintain expensive hardware and software.
In a recent tweet, Phala officials called AI Narrative “a leap toward an open and fair digital world.” The encounter between AI and blockchain is creating a decentralized future where AI agents will perform tasks and manage assets, powered by DeFi. As the core of the AI-Agent Economy, Phala Network plays the role of an AI co-processor to create a future for the decentralized world where AI and blockchain jointly empower digital agents.
4、GameFi
At the just past Sub0 meeting, Dr. Gavin Wood proposed a new protocol framework, JAM. As the basis of Polkadot 2.0, JAM will only handle work from parallel chains, smart contracts, etc. It lowers the barrier to entry for the Polkadot network, making it more flexible while allowing more abstract thinking EVMs to connect to parachain services, paving the way for a decentralized future.
The JAM protocol will bring the introduction of more new technologies and faster processing speeds to Polkadot, which will breed a richer variety of project types than existing blockchain applications. The JAM protocol and the launch of Polkadot 2.0 will undoubtedly provide more possibilities for the GameFi project, which means that game developers can design more complex game economic systems, and players can enjoy smoother and more economical games. experience.
In April last year, Mythical Games, the developer of the hit game NFL Rivals, announced its migration from Ethereum to the Polkadot ecosystem and announced the launch of the “Game Super Chain” on the Polkadot network, which greatly enriched Polkadot’s GameFi sector.
Mythical Games is a cutting-edge gaming technology company led by industry veterans with product lines including NFL Rivals, developed in partnership with the NFL and NFL Players Association (NFLPA), and multiplayer online role-playing games Game "Blankos Block Party". Its CEO John Linden once tweeted, "I really don't understand why I didn't choose to build a blockchain on Polkadot. The more I learn, the more I like what they have to offer."
Now, nearly a year later, Mythical Games is about to officially move. John said that Mythical Games is working closely with the Parity team and many other teams, with the goal of launching it in the first half of this year.
In addition to Mythical Games, Polkadot has also recently reached a cooperation with the well-known game engine Unity. This cooperation connects the Polkadot blockchain and Unity game development technology to reality, which means that Polkadot and Unity have taken a step forward in the field of Web3 games. An extremely important step.
As a company that mainly provides game engines, Unity occupies a huge 60% share of the mobile game market. This cooperation allows its existing 1.5 million developers to directly enter the Web3 industry through Polkadot, and also lays the foundatio
