Will Polkadot have a hard time after Ethereum 2.0 goes live? | ETH 2.0 vs Polkadot

The upgrade of Ethereum 2.0 has been in the spotlight. Ethereum plans to switch from Proof of Work (PoW) to Proof of Stake (PoS) in the second quarter of 2022, and the upgrade route has also been adjusted recently.

Some remarks believe that after the successful upgrade of Ethereum to 2.0, the existing problems of Ethereum will be completely solved, and Polkadot will have no chance to surpass. So is this the case?

Ethereum 2.0 and Polkadot do have some similarities, such as adopting sharding technology, PoS consensus, randomly assigning validators, and so on. This article will compare the similarities and differences between Ethereum 2.0 and Polkadot, combining the latest upgrade roadmap and their respective development progress.

Note: Starting late last year, the Ethereum Foundation said it would stop using the term “Ethereum 2.0” and instead refer to the “consensus layer” and “execution layer” for Ethereum 2.0 and the existing Ethernet manner, respectively. However, for your convenience, we still use the term “Ethereum 2.0” in this article.

1. Design goals

Before we start the specific comparison, let’s understand the design goals of Ethereum and Polkadot, which is probably the biggest difference between them.

Ethereum aims to be a platform for smart contract execution. There is no doubt that Ether is innovative and it has created a new track of application-based blockchains. However, the limitations of Ethereum were also quickly highlighted — network congestion, expensive node operations, PoW consuming a lot of energy, etc. Since 2014, the Ethereum community has been seeking solutions to these problems and has embarked on a protracted upgrade path.

As a result, it is still a smart contract platform, it’s just going to become more scalable, secure, and sustainable.

And Polkadot aims to be a Layer 0 blockchain, helping everyone create blockchains, providing shared security for those blockchains, and allowing them to easily interact with each other across chains.

2. The principle of Sharding

Both Ethereum 2.0 and Polkadot have chosen to shard to improve scalability. The difference lies in the state transition function, which is the rule governing how the blockchain changes the state of each block.

The main chain of Ethereum 2.0 is called a “Beacon chain” and each Sharding is a chain with an eWasm interface, with 64 sharding in total. Each one has the same state transition function that provides the interface for smart contract execution. Contracts exist on individual sharding (and can send asynchronous messages between shardings), so they can be scaled by executing them in parallel.

However, The sharding in Ethereum is still in the conceptual stage, and the community is still discussing future options. In the latest version of the Ethereum website, it is mentioned that perhaps the sharding chain will be considered as a data layer only, providing additional data to the network only, without processing transactions or smart contracts, or only a part of the sharding will process contracts.

In the Polkadot network, the master chain is called a “relay chain” and the splits are called “parachains”, and each relay chain is expected to support 100 parallel chains. The most important difference is that Polkadot uses Wasm as the meta-protocol, so para chains are not limited to a single interface like eWasm, but can define their own logic and interfaces, and simply provide their own state transition functions to relay chain verifiers for execution. In other words, parachain developers have the freedom to define their own rules for how their chains change state, and you can write any computer program in any language you like, as long as it compiles into WebAssembly. Applications can exist within a parachain or can be deployed across parachains.

In a nutshell, Ethereum 2.0 ’s sharding is what makes the original Ethereum model more scalable and can handle more smart contract transactions. Polkadot’s sharding is not limited to smart contracts, each parachain can be made into a completely different chain, for example, one parachain can be a smart contract chain similar to Ethereum, another parachain can be a chain built for DeFi applications, and another parachain can focus on NFT.

For example, in the case of Ethereum 2.0, there are too many work tasks for one employee to do, so they are divided into N interns, but the work they can do is still the same; in the case of Polkadot, there are different business departments, such as sales, marketing, and technology, each responsible for their own business.

3. Consensus mechanism

Both Ethereum 2.0 and Polkadot use a hybrid consensus model, which means that different protocols are used to manage block generation and block termination (finality).

Both of them use different protocols for block generation and block termination (finality), assign verifiers randomly, and can terminate a batch of blocks in one round.

The difference between the two is mainly in the block termination time and the number of validators required for each sharding.

Ethereum 2.0 ’s termination protocol, Casper FFG, terminates blocks based on epochs, with blocks terminated every 6 minutes (up to 12 minutes). In contrast, Polkadot’s termination protocol, GRANDPA, terminates blocks based on availability, with an expected termination time of 12–60 seconds for a block batch.

Ethereum 2.0 requires a large number of verifiers per sharding to provide validity guarantees. Polkadot overcomes this problem by assigning corrective codes to all verifiers in the system, which allows anyone to reconstruct a parachain block and verify its validity, allowing Polkadot to provide strong validity guarantees with fewer verifiers per sharding.

4. Staking mechanism

Ethereum 2.0 adopts the Proof of Stake (PoS) mechanism, which packs 32 blocks per verification cycle (epoch). Verifiers are rewarded once per epoch (estimated 6.5 minutes). The Beacon chain randomly divides the verifiers into multiple committees and assigns them to specific chunked blocks during the verification process. To provide validity guarantees, Ethereum 2.0 requires a large number of verifiers. In order to run the network properly, each sharding needs at least 256 committees to finalize all in one epoch, so 64 shardings would require 26384 verifiers.

Polkadot, on the other hand, uses the Nominated Proof of Stake (NPoS) mechanism, which allows some holders (nominators) to nominate validators through pledges so that they can share the block rewards without running validators themselves. Using the NPoS mechanism allows Polkadot to have fewer verifiers, with each parachain requiring only about 10 verifiers, so 100 parachains would require only 1000 verifiers. Although there are not yet 100 parachains, Polkadot has already launched an early “1000 validators” program to help increase the decentralization of nodes.

5. Governance

Ethereum 2.0 still does not address the governance issue. Currently, Ethernet mainly relies on off-chain governance, such as Github discussions, developer meetings, Ethereum Magicians forum discussions, etc.

Polkadot uses an on-chain governance mechanism. There are various channels for proposing motions, such as on-chain councils, technical committees, or the public. All motions are subject to a public vote, which is in the hands of the token holders. After the vote is passed, the motion will be executed on the chain itself. From how funds are allocated from the on-chain treasury to modifying the underlying code of the chain, all are decided and executed through the on-chain governance process.

6. Upgrade method

The upgrade method of Ethereum 2.0 still relies on the conventional hard fork, which requires verifiers to upgrade their nodes to achieve protocol changes.

Polkadot uses the Wasm meta-protocol to upgrade the chain without a hard fork.

7. Progress

The Ethereum 2.0 upgrade is an ambitious project carried out in phases and was originally planned to be completed in 2022. Ether has recently updated its upgrade route, taking into account that “Layer 2 network solutions such as Rollups have somewhat mitigated scalability issues,” and Ethereum has down-prioritized sharding to focus on the transition from PoW to PoS first. The latest Ethereum upgrade path consists of three phases.

Beacon chain: The Beacon chain adds staking to Ethereum and lays the foundation for future upgrades. The Beacon chain is already live on December 1, 2020.

Merger: Merging the existing main Ethernet network with the beacon chain, transforming Ethereum network from a PoW network to a PoS network. This phase is expected to be completed in 2022.

Sharding chain: The slice chain will increase the transaction processing and data storage capacity of Ethereum. It is expected to be completed in 2023.

Polkadot went live with a relay chain in May 2020 and the parachain in December 2021. Polkadot has completed the core functionality and the next focus will be on the continued launch of the parachain, as well as the upgrade of the inter-chain messaging protocol and the addition of features such as parathreads.

As of this writing, there are 14 parachains running on Polkadot, and 29 parachains running on its forerunner network Kusama and the number is adding.

As we can see, although Ethereum 2.0 and Polkadot have some similarities and the two projects started at similar times, Polkadot’s progress is undoubtedly ahead of schedule, as to how far ahead of it， depending on when Ethereum 2.0 will go live.