Polkadot Rise Strategic Planning Report

Introduction

Hello to all the friends concerned about Polkadot. We are a team focused on researching Polkadot and its ecological development opportunities and prospects, and we have continuously 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 disappointment from the community regarding Polkadot recently. Many people see no hope and have even left the ecosystem, which is something we do not want to see. With the launch of OpenGov on Polkadot, governance rights are increasingly being handed over to the community, and we can become a driving force for 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 growth strategy planning report that we believe outlines how Polkadot should rise, and many of the viewpoints are the results of our years of research.

This article will directly address the market rather than just the technology and ideals. We face the most real issues and propose improvement ideas and suggestions. Of course, we also see many teams actively proposing solutions to some of Polkadot's current issues in official forums and communities. However, these solutions are often singularly targeted at specific problems, without a comprehensive perspective to address them, or without a unified approach to solve multiple issues under a strategic framework.

We welcome everyone to point out the shortcomings in this article, and we also encourage everyone to generously offer advice and suggest feasible modifications 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 the Roadmap. Among them, 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 development 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 challenges. The price trend of the DOT token is unstable, with significant fluctuations, which may bring uncertainty to investors and ecosystem builders. At the same time, user activity has declined, ecosystem project development is sluggish, and there are some urgent 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 been facing challenges.

1. Technical Update Status

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

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

XCM V3: As the latest version of the cross-consensus messaging format, XCM has been launched in Kusama through governance. The release of XCM V3 brings innovative design, 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 chain-centric to application-centric and introduces several brand new concepts and technologies.

• Accord: A voluntary treaty across multiple chains, where the chains will 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 logic fragments based on relay chains, functioning like a secure tunnel to ensure safe transmission of information and value 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 light client solution, enabling them to create cross-chain applications with good user interfaces.

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 fellowship. Polkadot will also invest in updates to multiple 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 the on-chain situation of Polkadot in the second quarter.

Development Activity Status:

• The developer participation of Polkadot and Kusama continues to show a good rise, 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 remains relatively stable.
• Polkadot has the highest number of submissions in terms of protocols and ecosystems, as well as the largest number of 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.
• Polkadot revenue in the second quarter decreased from over $120,000 to nearly $81,000.

Total Value Locked (TVL) in Parallel Chains:

• In the Polkadot ecosystem, the top 6 DeFi-focused parachains are dominated by Moonbeam, Astar, Parallel, Acala, Moonriver, and Karura.
• The total locked value of the parallel chains experienced a decline trend after a period of rise in the second quarter, dropping from a peak of 236.12 million USD on April 14 to 146.77 million USD on June 30.

DOT staking rate and return rate:

• The staking rate of DOT in the second quarter of 2023 was 46%, below 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 had 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, jumping from third to second place, and maintaining a relatively stable ratio 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 ecological 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 capabilities with external networks, cross-chain locking, an improved fee payment mechanism, and support for non-fungible tokens (NFTs). In terms of 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 other parachains like Acala, Astar, and Parallel also maintain a high level of TVL.

Slot auctions are the process of allocating access to the relay chain, with winners gaining the permission to operate a parachain. Additionally, Polkadot ecosystem projects are attracting increasing 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 Situation

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, there has been 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 have taken different technical approaches. Compared to Cosmos, the price of ATOM is currently in a relatively low state, having dropped about 27.42% so far this year (with a brief rebound in June). However, overall, Cosmos's market capitalization has declined, currently standing at 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 of 2023, with a rise of up to 227% at the beginning of the year. Optimism now has a market capitalization of about 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 Status

Polkadot's official media currently includes the Polkadot official website, the Kusama network, Polkadot's Twitter, the Web3 Foundation's 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, engage with the community, 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 forums discussing technology and the future of Polkadot, 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 abundant, offering users various forms of participation and communication, which is very important for strengthening community consensus and expanding influence.

7. 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 voter turnout 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 public votes. The large number of public votes greatly enhances governance efficiency.

Currently, there are several issues with OpenGov governance:

The difference in voter turnout is significant: there are notable differences in the voter turnout of referendums across different tracks, especially regarding treasury expenditures.