Will Polkadot be Another EOS? Are Parachain Auctions Similar to Supernode Elections?
Recently, in the community, some people will compare Polkadot and EOS. Some people think that Polkadot’s parachain auction mechanism is similar to EOS’s supernode election. Some people worry that Polkadot will eventually face the same fate as EOS.
In response to these questions from the community, PolkaWorld invited 8 builders from the Polkadot ecosystem to talk about their views, many of whom are also early participants in the EOS community.
Guests:
Wang Qinwen: Web3 Foundation China Community Manager
Chen Xiliang: Laminar CTO
Jiang Fuyao: Acala Open Contributor
Xu Liucheng: Technical Director of ChainX
Lipeng Yue: Founder of Patract Labs
Guo Tao: Head of Zenlink China
Caizhen: Zenlink Product Leader
Tong Lin: Co-founder of Phala
Lurpis: Co-founder of Bifrost
Discussion 1: Are Parachain Auctions Similar to Supernode Elections?
Recently, an article on the Internet claimed that Polkadot adopted an auction strategy similar to EOS. They both require investors to stake tokens to gain community influence. For EOS, users can become supernodes by staking tokens. For Polkadot, users can win parachains by staking DOT tokens. Do you think Polkadot’s auction mechanism is similar to EOS’s? Will the result brought by Polkadot’s parachain mechanism be the same as the (chaotic) result brought by EOS?
Yue Lipeng: The voting chaos of EOS mainly comes from the union of nodes caused by plural voting（one token might be able to vote multiple times in an election), resulting in extreme centralization of nodes and loss of community participation motivation. This, in addition to the huge disadvantage of the resource model and the lack of maintenance from the founding team, has caused the decline of EOS as a whole. None of these factors has anything to do with Polkadot’s parachain auction, where each DOT can only vote once.
Caizhen: This questioner must have confused the Polkadot parachain slot auction mechanism with the EOS mortgage mechanism.
First of all, the two face different objects. The Polkadot slot auction is aimed at projects who want to become parachains, while Polkadot’s candidate validators are guaranteed by the BABE algorithm. The staking mechanism of EOS is for those who want to become validator supernodes.
Second, the bidding methods of the two are different. The Polkadot slot auction uses the candle auction mechanism, that is, “the highest bidder in a random time period wins”. This avoids the risk of some malicious bidding, and encourages projects that are really in need and want to contribute to the Polkadot ecosystem to have a greater probability of obtaining parachain slots. In the end, in my opinion, the chaos of EOS is more caused by the inaction and chaos of the EOS team and leaders, and has little to do with its staking mechanism.
Tong Lin: The slot auctions are different from the EOS supernode election.
The biggest difference is — Parachains cannot directly earn income by winning slots; but EOS nodes can earn monthly inflationary income by winning the election, that means, meal tickets! In 2018, 21 EOS nodes won and become supernodes, and each node will receive about 2.38 million EOS from the 5% annual inflation. According to the calculation of 40 yuan per EOS at that time, a node can get a reward of RMB 100 million!
But the parachains get the slots, and there is no direct benefit for that. So what will they get? Network resources — that is, the security and cross-chain communication capabilities brought by slots, and of course, the value of goodwill. Therefore, it can be seen that the motivation behind the Polkadot slot competitors is completely different from the EOS nodes.
For the token holders, voting for an EOS node is nothing more than obtaining 5%-6% of the EOS standard annualization, and will not contribute to ecosystem prosperity; but participating in the Polkadot auction, not only can you get more than 15% of the annualized income, and can also obtain tokens of different Polkadot ecosystem projects in a decentralized manner, which is more similar to the fact that ETH holders mortgage various DeFi protocols to mine, and finally DeFi prosperity promotes the breakthrough of Ethereum value. The ending will be more like this.
Lurpis: The Polkadot slot auction has no rigid income, and the return from participating in the slot auction depends on projects’ effort, which makes the parachain slot auction form a positive cycle mechanism — survival of the fittest, and finally screened out high-quality projects which have complete business logic and can cover the slot rental cost. In order for a parachain to win the parachain slot auction while maintaining the cost of the parachain lease, it needs to continuously improve and upgrade, increase the fit in the market, and gain more user support, otherwise it will usher in the elimination of the market. Compared with the EOS supernodes, which guarantee income during droughts and floods, bribe each other, and have no incentive to provide value, the Polkadot auction mechanism is fundamentally different from the EOS supernode election.
Jiang Fuyao: The Polkadot parachain slot auctions are fundamentally different from the EOS supernode elections.
When the Polkadot parachain slot auction starts, projects including Acala will use the Substrate crowdloan module to start their parachain slot bidding, and then all DOT holders can choose the projects they support, and lock their DOTs. All locked DOTs will directly enter an account of the Polkadot relay chain without going through the projects, waiting for the slot auction to start.
After the parachain auction ends, if the project successfully won the slot, then the DOTs of all participants will not be able to be transferred within the certain locking period, and will not be unlocked until the end of the period. The locked DOTs will be returned to the participants immediately if the project fails the auction, so the Polkadot parachain needs continuous development to keep the slot, and it may be eliminated if it is neglected.
On the other hand, in EOS elections, any EOS node that wins in the election can earn easy money, it also means a vicious circle of competition. There is no good incentive for the positive cycle, but passive rigid income.
The Polkadot parachain slot auction is the survival of the fittest. After the parachain lease expires, the slot needs to be auctioned again from scratch, which will make many projects have to optimize and innovate, and can continue to be based on market incentives to ensure re-participation after expiration. Only by being competitive in the auction can the community users participating in the support gain benefits and form a virtuous circle.
Guo Tao: I think there is an essential difference between Polkadot’s parachain slot auction mechanism and EOS’s supernode election voting. Polkadot’s auction is aimed at parachain projects, not network validators. And through the “paid lease” auction method, it can greatly avoid the election of projects with poor quality, making “valuable projects better and useless projects worse”. In addition, this is also fundamentally different from the Ethereum ICOs back then that had low market entry barriers. In short, this is a more systematic game system.
Chen Xiliang: Polkadot’s mechanism has no similarities with EOS, and Polkadot and EOS are not comparable. And whether an ecosystem is good is not entirely technical. There are a lot of forked coins of Bitcoin, each of which is not inferior to Bitcoin from a technical point of view, but what does this mean? Does the chaos caused by these forked coins have anything to do with the PoW mechanism or other Bitcoin mechanisms?
Discussion 2: Will Polkadot be Another EOS?
At this stage, Polkadot ecosystem is still in the early stage of development, but some Polkadot ecosystem projects have been greatly affected by some negative news. Do you think Polkadot can get rid of the destiny of rise and fall like other Ethereum alternatives (such as EOS)?
Yue Lipeng: EOS is a smart contract platform like Ethereum, a product of the same era, and the smart contract technology of EOS is more advanced than that of Ethereum, but because other shortcomings are too short, the entire ecosystem has declined. Polkadot goes beyond the scope of smart contract platforms and is a platform for chain innovation, which will break through the shackles of Ethereum.
Tong Lin: Polkadot may have an underestimation period, but it is definitely different from EOS for three reasons:
Teams are different. The core team of Polkadot, the Web3 Foundation and Parity, are completely different from BlockOne in their ability, determination, and reliability to do things. You can see what the two teams did after they got the money respectively.
The founders are different. Gavin is clearly more focused on reputation and professional achievements, and the probability of him leaving before Polkadot is completely successful is very small. However, BM, as expected, only works on each project for three years, not three years after three years like Chen Yongren of Infernal Affairs.
Entrepreneurs are different. The early promoters of EOS were capital and profit-seeking nodes. However, the promoters of Polkadot were down-to-earth and organic development teams. I don’t know if you have found it. Polkadot projects rarely have projects with extremely high valuations. — — The reason is that the seed players in this ecosystem are very real entrepreneurs, and they will not raise unnecessary money. Some people say that Polkadot has too many Chinese projects, but I think why is this a bad thing? Are all Chinese projects the same, and are all Chinese projects shameful? Most of the Polkadot projects I know are excellent entrepreneurs who are very technical and product-oriented.
Of course, as the popularity of Polkadot has increased, the projects that are full of money have also sprung up like bamboo shoots after a rain. I hope everyone can keep their eyes open, read more knowledge articles on PolkaWorld, and understand the ecosystem, so that it is easier to identify the difference between good projects and bad projects, and to step on fewer pits.
In addition, investments are all risky, and I think Polkadot will also encounter a trough in the next 1–2 years. But unlike EOS, I believe that the current Polkadot is like Ethereum in 2017. After the trough period, breakthrough and subversive business innovations like Defi will grow in the ecosystem, allowing the value of Polkadot to break through again!
Jiang Fuyao: After so many years in the crypto space, to sum up, in the early stage of any high-quality project, there will be negative news from the media, pay attention to the self-media. These so-called news have obvious purpose. Think about it: If the people who push this matter, if they hold Polkadot, how can they release negative news. If he doesn’t hold DOT, what is the purpose of them sending this news? To put it bluntly, if you didn’t buy it, the higher the price is, the higher your cost will be.
I have worked on Polkadot for more than 12,000 hours, and finally concluded that Polkadot has development prospects. Let me ask: How many times have you seen the Polkadot mechanism from the media? How many days have you been researching? How many days have you felt for it? How many days have you stayed in the community? How many days have you communicated with community members? Just grab a bunch of misleading data from some wrong data sources, send a quick message, and get a chat record. Pure nonsense.
Guo Tao: First of all, let me clarify that the proportion of domestic projects of Polkadot Ecosystem is less than 30%, so it is a misunderstanding to say that “Polkadot Ecosystem projects are all Chinese projects”. As for the negative news of some projects of Polkadot ecosystem, I think it is normal. There will be any bird in the forest, so the power of the market is needed to complete the screening of pros and cons. We at Zenlink don’t pay much attention to these, we focus on the development of our own products and cooperation with external projects. In the end, whether the future of Polkadot will be like other public chains (such as EOS), I don’t think there is any need to worry. There is a world of difference between the two in terms of technical architecture and human factors.
Chen Xiliang: There are a bunch of imitation dapps on Ethereum and a bunch of forked coins in Bitcoin, but does this have any real impact on Ethereum and Bitcoin? It is inevitable that there will be some opportunistic projects in every Layer 1 ecosystem.
Wang Qinwen: The Polkadot team (whether it is Web3 Foundation or Parity Technologies) has devoted a lot of effort to the investment in ecosystem construction and developer program. All activities are basically based on technical education. We are very concerned about the needs of technical developers and the knowledge of technical ecosystem. I think this is the most fundamental difference from EOS.
The founder, Dr. Gavin Wood, has a successful experience in Ethereum and is extremely focused, insisting on continuing to create and develop important milestones. This is the biggest difference from BM.
Technological innovation and mechanism design emphasize the concept of fairness and transparency. Whether it is the redenomination at that time, the algorithm behind the nodes, the treasury process of the council and the parachain auctions, all emphasize the participation of all community members.
As for the community, we are proud to have a group of very united ecosystem projects supporting Polkadot from all aspects of technology and community. We firmly believe that Polkadot will walk out of its own destiny.
