Hey everyone - I have missed seeing many of you on calls recently and hope you’re doing great. I wanted to check in after having spent a couple months now outside of Polkadot for the first time, which has been enlightening to say the least. My goal in this post is to give some thoughts on how Polkadot positions itself in the market and some potential changes that could help in more correctly describing Polkadot to potential blockchain dev teams who right now are not even considering Polkadot as an option. Almost every good chain dev team is choosing ETH L2 (Polygon Supernets, Arbitrum L3, or OP Stack) or Cosmos for building new chains.
One of the things I’ve noticed most, especially now working on an interoperability protocol, is the fact that Polkadot’s narrative and messaging framed first and foremost as an ‘interoperability solution’ is really missing the point of what Polkadot provides as the most important benefit(s) to top blockchain development teams like Frax, dYdX, or opBNB Chain.
The Polkadot Twitter describes itself as “a sharded protocol that enables blockchain networks to operate together seamlessly”. Similarly, Polkadot’s main selling point on its website says “Polkadot unites and secures a growing ecosystem of specialized blockchains called parachains. Apps and services on Polkadot can securely communicate across chains, forming the basis for a truly interoperable decentralized web.”
I really think the main selling point (interop) of Polkadot right now is completely missing the point because Polkadot provides Polkadot-only interoperability. Protocols like Axelar, LayerZero, and Wormhole are doing a vast majority of the volume for actual crypto-wide interoperability, making Polkadot’s main selling point irrelevant to nearly every potential new appchain dev team (the main target dev audience for Polkadot). Interoperability within Polkadot’s world only becomes a benefit to chain dev targets when there is significant user activity and volume on multiple parachains.
Recent teams choosing a chain development platform:
- BNB Chain just announced opBNB as a L2 chain on the OP Stack. Why would they do this? Optimism has momentum, it has users, and it has liquidity (in the OP Stack ecosystem as well as on ETH mainnet, just one bridge transaction away) and it’s relatively easy to build with.
- Frax just announced Frax Chain as an ETH L2. Why? They want to be close to the ETH mainnet liquidity. They are not launching on Polkadot because Polkadot doesn’t have liquidity or users and they don’t need interoperability from Polkadot because you only need that if the other chains on Polkadot are valuable to interact with. Frax also needed more utility for its token, as most teams transitioning from app-to-chain do, so an ETH L2 gives it the ability to use the token for gas.
- dYdX is launching a chain in the Cosmos ecosystem. They did this because Cosmos SDK gives them flexibility, there are a decent amount of strong chains in the cosmos ecosystem, cosmos has momentum, and cosmos has a decent amount of liquidity. Teams like dydx are also launching chains because they need their token to have more utility (operating as the chain’s fee token) than it would as just a governance token for their app.
The key takeaway is that these chains aren’t choosing their chain development stack for the interoperability benefit. They’re choosing it for ease of development / speed to market, regulatory strategy regarding token, and liquidity/userbase. Polkadot can provide all of these technical benefits, often even better than competitors, and can work its way to solving the liquidity/user problem later.
These are some of the main things blockchain teams actually care about that Polkadot can provide:
- Modular & Customizable - all the benefits of Substrate plus flexibility to fit each team’s use case
- EVM compatibility - Polkadot’s modularity also allows any chain to be EVM-compatible
- Security - high-grade security provided to parachains. No setting up validator set required.
- Regulatory Compliance - DOT is software narrative + native gas token to operate your chain - a strong consideration for most teams transitioning from app to chain
- On-chain Governance - Polkadot is so far ahead of its time with governance, and luckily governance is starting to pick up in other mono-chain ecosystems. This is a great added benefit, although not something to lead with.
Case in Point: Polygon Supernets (Selling Polkadot better than Polkadot)
Look at Polygon’s supernets site for an example of how Polkadot could be building its messaging. They are selling Polkadot much better than Polkadot is: “Polygon Supernets allow you to create high-performing, customizable App-chains with compliance implementation options, in a fast seamless way.” What they are selling: “high-performance, customization, compliance, fast.” When you scroll down, they also sell “Native gas token”. Polygon likely has a much better pulse on the actual needs of its developer audience and this comes through beautifully in their messaging.
Polkadot’s tech is incredible and no one denies that, but Polkadot still needs to go from 0 to 1 in terms of adoption and momentum. In all honestly, Polkadot right now is not even in the conversation, whatsoever, and something needs to change. With a bit of thought on messaging and positioning with the blockchain dev teams’ real needs in mind, it could help a lot in selling the true value of Polkadot. The other challenge will be to figure out what makes Polkadot different, even with the shift in messaging away from interoperability. Modularity/Substrate, Security, Regulatory, and Governance are all good angles that other mono-chains or L2 ecosystems aren’t doing super well.
Anyway, I hope this at least gets some creative juices flowing and helps to think about Polkadot from a slightly different perspective. I want nothing but success for the Polkadot ecosystem and am excited to see things continue to progress over the years.