Gu Yanshi: Polkadot to the left, Cardano to the right
Cardano is also very confident that it can migrate around 100 million users to its platform in one or two years through this method. In contrast, Polkadot clearly relies entirely on the natural growth of its ecosystem.This article was first published in Planet Daily, authored by Gu Yanxi.
Polkadot and Cardano are public chain projects that emerged after Ethereum. The founders of both projects are among the original eight founders of the Ethereum Foundation. Both aim to provide a public chain that is better than Ethereum. In the current cryptocurrency bull market, both have seen their market capitalizations rise to the top 5 in the cryptocurrency market. This indicates the market's recognition of these two public chain projects. However, the two projects are now developing in different directions and do not form a competitive relationship. They provide the market with two different types of public chain solutions.
In terms of technology, both have a two-layer architectural design. The bottom layer is responsible for security and validation, while the upper layer handles specific business computations. Of course, the two projects differ in their specific implementations. Polkadot's design is more innovative. Its second layer supports 100 parallel chains. These parallel chains are provided by the market and obtain operational qualifications through slot auctions. In contrast, Cardano's second layer mechanism is more similar to Ethereum.
In terms of design philosophy, Cardano pursues maximum distributed computing. In terms of the number of nodes, it aims to be 50 to 100 times the number of Bitcoin nodes. In terms of token distribution, Cardano also strives for equality. Nearly 90% of its total token supply will be held by the community. Additionally, Cardano's design for each node only supports an optimal number of staking tokens. When the number of staking tokens in a node exceeds this optimal value, the rewards for each token will decrease. This design avoids excessive concentration of token holdings in certain nodes, promoting a more balanced and equitable system. Among the tokens currently circulating in Polkadot, about 60% are held by the community. Therefore, in terms of democratic equality in the systems being built, the Cardano project is more advanced.
In terms of ecosystem development and community promotion, the two adopt different strategies. The Polkadot Foundation provides funding support to developers in the community for the development of various applications within the Polkadot ecosystem. As a result, various types of projects have been developed in the Polkadot ecosystem to date. In contrast, the Cardano project mainly relies on its companies IOHK and Emurgo for underlying development. So far, there has been no support for the developer community to develop projects on its chain. Its plan in this regard is to select projects for development in its ecosystem through community voting in the future.
In terms of the types of users served, Polkadot follows the characteristics of blockchain projects, primarily targeting developer communities and retail users, while the Cardano project focuses more on institutional clients. Cardano has a dedicated team responsible for collaborating with governments in some African and Central Asian regions. In the near future, it will announce a partnership already established with an African country, which will see about 5 million users establish identities on the Cardano project and use applications built on it. Cardano is also very confident that within one to two years, it will migrate around 100 million users to its platform through this approach. In contrast, Polkadot clearly relies entirely on the natural growth of its ecosystem. Its approach to development is similar to that of Bitcoin and Ethereum.
In terms of supporting the automatic operation of the system, both are working towards achieving the automatic operation of public chains. The operation and maintenance of the system are also supported by the foundation. Cardano was launched in 2017 and is being rolled out in phases. On March 1, 2021, it is set to launch its third phase, the Goguen phase. In this phase, the Cardano system will begin to support smart contracts and various types of assets operating on it.
After the Goguen phase, there will be the scalability-focused Basho phase and the governance-focused Voltaire phase. Polkadot launched in May 2020 and became an automatically operating system in August. However, the launch of its parallel chains requires slot auctions, and this process is managed by the Web3 Foundation.
Despite these differences between the two projects, I believe that the competition between them is definitely not a zero-sum game. The development of the blockchain-based cryptocurrency ecosystem has just begun, and various underlying distributed ledger technologies for public chains will provide foundational support for such a digital ecosystem, so there is still significant room for long-term development in the public chain project market. Both projects have enormous development potential.
This is similar to the early development of the mobile internet, where various underlying operating systems had vast development space. In this sense, Ethereum 2.0 also has significant development potential. As long as these public chain projects have their own distinctive features, including in technology, governance models, user groups served, and industries served, they can form differentiated competition.
For users of public chains, the development of these projects also provides more choices. For investors in public chain projects, both Polkadot and Cardano have made significant progress to date, each with its own characteristics, so both projects are worth paying attention to. Investment strategies can be adjusted according to the progress of these projects. In the long run, both projects offer very good investment opportunities.
