Polkadot: The centralized decentralized ecosystem - a cartel?

[taqtiqa-mark]

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

@rphmeier

Please forgive me for being blunt,

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

@rphmeier

but I do think that this approach

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

@rphmeier

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.

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.

@rphmeier

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.

I don’t dispute any of that.

@rphmeier

This blockspace is a commodity.

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?

@rphmeier

The mechanism of allocating blockspace via parachain auctions is only a detail;

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

@taqtiqa-mark

… 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”

@rphmeier

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.

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.

@rphmeier

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.

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?

@rphmeier

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.

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?

@rphmeier

Creating more relay chains (or free-standing blockchains in general) means higher competition for the scarce resource of capital, not lower, …

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):

Grant: Substrate Tokenomics Survey

@rphmeier

… as compared to the approach of leveraging capital at stake into larger quantities of secure blockspace altogether.

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:

@taqtiqa-mark

@taqtiqa-mark

Why are people trying to develop a decentralized ecosystem via a centralized “choke-point” - Polkadot?

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)?