Polkadot: The centralized decentralized ecosystem - a cartel?

This contradiction arose from the observation that if you’re developing some solution around a Parachain, your solution likely won’t scale out-the-box:

Proof that Poltadot is a choke-point is the fact that Polkadot Parachain slot auctions are a permanent feature and not a temporary workaround (“A parachain slot is a scarce resource on Polkadot as only a limited number are available”). Further, I observe Parachains seem to develop their own:

  • Tokens/coins
  • Governance

Is it possible that, for a truly decentralized (and scalable) ecosystem, the unit of development should be a Relaychain rather than a Parathread/Parachain?

If so, is statemine/t a suitable candidate to use as a PoC, i.e. would this provide a pathway to resolving some of the issues that have been raised by the recent roadmap?

This vision seems to naturally suggest the following:

  • Polkadot Parachains:
    • Use DOT exclusively
    • Use Polkadot goverance and not their own
    • May still have to compete for slots, more for reasons of quality than scarcity
  • Parachains that can’t/don’t fit these criteria spin-off into their own Relaychain
  • Relaychains are delimited using similar criteria to the above

With an ecosystem decentralized in this way, the question becomes how do Relaychains communicate robustly.
Specifically, how would the Statemine/t Relaychain interact with Polkadot and which ever Parachain spun out of Polkadot into another Relaychain.

This shift from a centralized-decentralized ecosystem to a decentralized ecosystem appears to come at the cost of having to introduce another abstraction - cross Relaychain communication.
However, perhaps - XCM/P could likely fulfill the needs of cross Parachain and cross Relaychain communication.
This would leave robust message passing infrastructure as a missing piece - and there are lots of existing mature solutions in that space.

Thoughts?

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Most of the points raised here are better suited to the ‘ecosystem’ section than to the technical discussion section of the forum.

Please forgive me for being blunt, but I do think that this approach is fundamentally mistaken in the sense that it doesn’t recognize the primary product of Polkadot, why that product is useful, whether that product is easily replicated, and what users it might find.

The primary product of Polkadot, as with other blockchains, is blockspace. The blockspace produced by Polkadot is of high quality, with high security guarantees, and highly flexible. In the marketplace, that’s a product which will be of use to many products higher up the value chain which neither use DOT exclusively nor avoid self-governance. This blockspace is a commodity. The mechanism of allocating blockspace via parachain auctions is only a detail; a packaging of the product for the market and the mechanism’s existence is only proof of the fact that Polkadot does not produce infinite quantities of secure blockspace from a finite amount of capital at stake and finite amounts of underlying compute & networking resources, which I personally don’t find either alarming or contentious.

The key question for any alternative relay-chain or indeed any alternative blockchain is whether it can gather a significant level of economic security to produce blockspace which is attractive to the market. The rest is just a question of administration & packaging of blockspace.

I would strongly contend that Polkadot itself is not a chokepoint but that it is rather the acquisition of economic security (i.e. capital at stake) which is a chokepoint. Creating more relay chains (or free-standing blockchains in general) means higher competition for the scarce resource of capital, not lower, as compared to the approach of leveraging capital at stake into larger quantities of secure blockspace altogether.

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Very much agree with Rob here. Shared security, decentralization, and scaling are all necessities. If each major project operated its own relay chain, both security and decentralization would be greatly diluted.

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I see a lot of confusion between the Substrate framework and the Polkadot implementation.

What is really decentralized in terms of governance is the Substrate framework, which allows you to set up pretty much what you want in terms of governance and all the rest of your blockchain protocol, already with an excellent level of security (provided you didn’t designed your protocol in a hurry…).

Thus everyone chooses their currency according to their characteristics and their system of governance.

That’s decentralization :slight_smile:

Am I wrong ?

Is this forum only for polkadot implementation and parachains, or also a bit for the rest of the substrate ecosystem ? @gavofyork ? @xlc ?

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@poka You’re right that Substrate allows for the construction of stand alone chains with diverse characteristics. That is indeed a kind of decentralization through a diversity of protocols. But that kind of diversity comes at the cost of security.

For instance, with five stand alone chains using proof of stake you are splitting security capital five ways vs no split with Polkadot. As a result you can expect security guarantees to be at best one fifth as strong. And the security situation becomes even worse if the distribution of staking capital is in any way unequal. See the Axie Infinity/Etherium bridge for an example of how that can go terribly wrong.

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I agree with that. That’s why with Duniter for example (I’m talking about what I only know, I’m part of the development team in France since 2016), we don’t use proof of stake:

Only the web of trust of the Ğ1, in deployment since 2017. Now with the wonderful BABE and GRANPA !

Also, Ğ1 is about RTM (Relative Theory of Money) written by stephan laborde. So the token are created only be universal dividend, each days on each wot members accounts (certify by 5 other members, with differents wot onchain security rules (sybil attacks)).
Universal Dividend (UD) is our common unit of measure.

No need global $/btc ponzi economy, just Ğ1 currency and network.
No need proof of stake.

I’m sure there are other systems that don’t need these mechanisms either.


We don’t know each others, I mean our team/community and Polkadot dev team/community.
Today Polkadot is nothing in France, Spain, italia ect …
Ğ1 and RTM is pretty popular here.

But I would like us to discuss more between us :slight_smile:
For instance, we have no experience about onchain governance, we are discovering what Polkadot is doing, and we will take inspiration from it to adapt it to our needs.

You (polkadot) have no experience about RTM and web of trust.

Unity is strength

Update: Gold/Coal metaphor to Diamond/Coal to better capture the scarcity/ubiquity distinction.

No need to apologize. I understand these are topics on which peoples incomes/savings are dependent - I’ll try to bear that in mind.

I’ll assume “this approach” means using the relay-chain as the unit of development.

I hadn’t thought of the use of relay-chains as posing a challenge to Polkadot. My intuition was such uses would serve as specialized ecosystems that Polkadot would tap into.
I’ll need to think more about how use of relay-chains reflects a lack of recognition of Polkadot usefulness, as well as the other points raised.

I don’t dispute any of that.

Sure.
However, is it like Diamonds - with important use cases e.g. scarce thing of beauty in its own right, provides an input to high-end industrial applications etc. That is, a low-volume high-value essential commodity?
Or is it like Coal - with important use cases e.g. powering humidicribs, provides an input for carbo-hydrates etc. That is, a high-volume low-value essential commodity?

Yes. The structural constraint of this mechanism is what I asked about:

I don’t think I expressed alarm. Puzzlement, yes. Capital constraints are important, and won’t go away anytime soon. You are correct to point out that even if Polkadot was to solve/remove (which?) the structural constraint on the number of Parachains available, the community may still be faced with a binding “capital constraint” on the production of block space.

Okay, I think I’m building a clearer picture … is it correct to say the scarcity of/constraint on the number of Parachains is self imposed? Or is it a limitation of Substrate?

Puzzled by this - are you claiming the Polkadot “capital constraint” will always be binding before the Parachain saturate/consume the guaranteed blockspace they have available?

Fascinating perspective - thanks for sharing it - I’ve opened a W3F grant application to try and start challenging some of these misconceptions (I’ll leave capital allocation aside as it is off-topic):

No matter how much capital there is, Polkadot will always be limiting the guaranteed blockspace available by the restricting the number of Parachains - correct?

Nonetheless, this capital-allocation objection to additional relay-chains doesn’t address the question.

To return to the question:

I’ll throw out some speculative possibilities in the absence of anything else. There are three possible reasons, jointly:

  • Substrate has a hard/technical limit on the number of Parachains per relay chain, and this limit is … ?
  • The (further?) limited number of Parachains constrains supply of guaranteed places in the blockspace, hence (via related demands) increases the value of DOT possibly/hopefully overcoming the inflation rate by enough to compensate investors for financing Polkadot/Substrate development.
  • The limited number of Parachain slots offers Parachain investors the allure of potentially being a monopoly/duopoly/oligopoly supplier. This too is a source of demand/value for DOT (see above re investor compensation), i.e. the prospect of excess rents/profits attracts capital to the Polkadot ecosystem.

Some other reason(s)?

I believe this question of whether additional relay chains harm security is important, fascinating and off-topic. That is, it is a question of capital availability/allocation and possibly relay chain federation design.

Unless someone has beaten me to it, I’ll open a thread on this once I’ve collected my thoughts.

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IIUC, one way to improve the capital-allocation efficiency in securing the Polkadot ecosystem is being discussed here:

Based on my current understanding, this would also be a way to remove/weaken the centralized nature/feature of Polkadot.

The current upper number of Parachains is just an educated guess, something to strive for. Depending on how the system performs in real life, the number could maybe be higher. However, with the introduction of parathreads this number will clearly be higher. This upper number is the number of concurrently advancing parachains/parathreads on the relay chain. As the idea behind parathreads is that certain chains don’t need a fixed block time of 6s and are having varying depending on activity on the parathread, the relay chain can run much more parathreads.

There are also ideas around scaling Polkadot. It isn’t the idea (and I think it never wasn’t) to stop at 100 Parachains. However, at some point we will reach a limit and need to either create “relay chain shards” or maybe create secondary parachains. All of these ideas are theoretical so far, but we are already thinking of what comes after the (first) 100.

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Any discussion about high level structure for a multi blockchain ecosystem that doesn’t account for security is deficient in my view. That would make it very on-topic.

Parachain teams could have chosen to develop stand alone Substrate chains and to establish cross chain communication similar to IBC in Cosmos. Such a setup would have presented the benefits you mentioned. But evidently they haven’t chosen to do that, because shared security is just that important.

I really appreciate that you surfaced this conversation! Additionally I respect your point of view and argumentation. Just happen to disagree in this instance.

The official documentation I linked to does not suggest this. As I observed at the outset

IIUC, Parathreads and Parachains are categorically distinct: one has risky (Parathreads) and the other risk-less (Parachains) blockspace. Correct?
If so, interchanging them in the way you suggest is problematic - like saying investing in US treasuries and Solyndra are interchangeable.

Improving capacity/efficiency is important - but would still leave Polkadot as the choke point.

At the moment it appears the number of Parachains is limited for the same reasons DeBeers limited the number of diamonds - price support.

The reason this is of interest, to me, is that it impacts how we think about DOT.

If Polkadot is a competitive firm, it is a price taker, and we can reasonably argue for using certain models of structured randomness.

If Polkadot is a non-competitive firm (cartel, monopoly, duopoly, etc.), it can influence/control prices, then we have to take a different approach - leaving aside the regulatory/legal issues.

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IIUC, you’re asserting the same claim that @rphmeier did - the capital constraint will always be binding before the number of Parachains runs out of blockspace

Can either of you or @rphmeier point to where that is established (assumptions, calculations, etc.)?

I pointed to some possible motivations for wanting to hold a Parachain:

The importance of shared security does not negate the original observation

IIUC, you and @rphmeier are of the opinion that even with unconstrained number of Parachains we should still expect chains to coalesce under a Relaychain because security is hard and there are some capital efficiencies to gathering under a Relaychain - note my suggestion allowed for this

Anyway, as best I understand things you and @rphmeier might claim Polkadot is a natural monopoly due to capital constraints/availability?

However, to me this is by the design/choice of a token-economy tailored to support Polkadot/DOT as a security for early investors.

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I think I see what you’re getting at here. And for an individual chain maybe factors could stack up so that it makes sense to handle security independently.

But the effect of many such chains communicating with each other is a risk management nightmare. Suddenly businesses that are merely clients of blockchain services would need to assess the risk associated not just with the chain they use, but with every chain it shares assets or even communicates with.

Maybe algorithms could be developed to price the risk associated with heterogeneous chain security environments so that serious businesses can risk touching them. But Polkadot’s approach is to instead flatten the security landscape while increasing overall total security. Seems good to me :man_shrugging:

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Apologies, what I’m “getting at”, is trying to think clearly about the nature of Polkadot:

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As this thread has progressed, its been more clear the root you’re getting at. Ostensibly this is about the economic viability of the current incentives and associated slot scarcity (or not) correct?

@rich, not sure if that question, while quoting @brad.olson.587, was actually directed at me. In case it was …

To be fair I think what I was getting at was very clear:

I thought it might be considered click-bait, so I gave some context and justified the “choke-point” claim. Why I’m interested in thinking about Polkadot is irrelevant to the reason why you or others are developing a Parachain, so I left it out.

@rphmeier sought to challenge two observations around the scalability of Parachains (the context):

  1. That Polkadot is the choke-point
  1. That Relay Chains are the natural unit of development in the context given (scalability)

From there the conversation went sideways - and down the economic security is scarce/hard rabbit hole.

Every industry and firm faces capital scarcity and technological hurdles/barriers to growth.
But few hold repeated auctions of the same item (after you have to return it to them) - even DeBeers will let you buy/own diamonds.

I posed several questions to @rphmeier. Until then, I think we can consider this as resolved as it will ever be?

To summarize what has been said so far: Obviously, yes having shared security (what the relay chain provides) is limiting block space - hence it is a choke-point. One that can be pushed and optimized, but it does only provide limited resources. But we do this for a reason - you could have lot’s and lot’s of relay chains, but none of them would be secure - they would be fast and you have indefinite resources, because if you need more block space you just create another relay chain, but the more you have the less capital secures each of them and the reason blockspace is worth anything is the assumption that it is secure.

So talking about available capital is not off-topic, it is the answer to your question: It is a choke-point, because it needs to be. If we ignore security, there is no scaling issue, but then you also don’t have a blockchain.

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