Polkadot Parachains vs. Ethereum 2.0: Which Is More Worth Anticipating?

In the recently passed October, the cryptocurrency market experienced successive "celebrations." BTC , ETH , DOT, and many other mainstream coins successively hit record highs, and the dogcoin series also surged again and again, driving market sentiment to new heights. On November 4, ETH reached a new high of $4,668, and DOT hit a historical high of $54.543. Against this backdrop, Polkadot is also officially kicking off the curtain on parachain slot auctions.

As everyone knows, the blockchain "impossible trinity" problem has always accompanied and plagued the development of various public chains. As a star project with the grand vision of Web3.0, Polkadot, besides mainly focusing on cross-chain, is also committed to solving blockchain scalability and decentralization issues, while Ethereum has also spent significant energy and cost on the ETH 2.0 upgrade to solve Ethereum network expansion and a series of other issues.

Due to the founders' identities and project backgrounds, people usually mention Polkadot and Ethereum in the same breath, and even viewpoints like "Polkadot will surpass Ethereum" have emerged one after another. As both major projects steadily progress, who can better carry the vision of future public chain development? Who is more worth anticipating?

1 , Polkadot and Ethereum's respective progress

First, let's look at the current main progress and status of Polkadot and Ethereum.

In 2016, the first version of the Polkadot whitepaper was released, marking the debut of the Polkadot project. In 2017, the Web3 Foundation was established and DOT conducted its first sale. Since then, Polkadot quietly developed for two or three years, with almost no trace in the market. Until August 2019, Polkadot launched the canary network Kusama to test Polkadot's governance, Staking, sharding, and other functions in a real economic environment, and Polkadot began to gradually attract market attention. In May 2020, Polkadot launched the first mainnet candidate chain, marking the beginning of its phased launch process. By this point, Polkadot also entered the competitive track with Ethereum and many other public chains.

After more than a year of testing, Kusama's functions have been basically perfected, and the test operating environment is stable. Polkadot's core function development and ecosystem applications have also made significant progress. In the past year or so, the Polkadot network has transitioned to the NPoS (Nominated Proof of Stake) mechanism, enabled governance and DOT transfer functions, released Substrate 2.0, and core functions such as XCMP cross-chain message passing and parachains are also successively coming online.

In addition, due to Polkadot's heterogeneous structure, parachain slot auctions have become a much-watched industry event in the past two years. As of the end of October, Kusama slot auctions have entered normalization and successfully opened the 13th slot auction. Already, 11 projects including Acala and Bifrost have become Kusama's parachains. As of now, the total amount of KSM locked in Kusama parachain slots and crowdloans reaches approximately 2.53 million KSM , accounting for 21.8% of total issuance. Polkadot has also announced that slot auctions will begin on November 11, and many projects are already preparing for the Polkadot auctions. It is worth noting that the OKX platform has launched an early bird auction activity where users can quickly participate in slot bidding with zero fees and enjoy rewards from the OKX platform and project teams.

Meanwhile, the public chain leader Ethereum has experienced 7 years of ups and downs since its development in 2014, witnessing the ICO boom, DeFi Summer, NFT craze, and more. Currently, Ethereum is in the "Serenity" phase of its roadmap, committed to completing the ETH 2.0 upgrade.

Since the launch of the Beacon Chain in December 2020, Ethereum has officially begun transitioning to Proof of Stake (PoS). This new PoS system is part of the Ethereum 2.0 overall network upgrade and is currently running smoothly. As of November 3, there are over 250,000 active validators on the Beacon Chain, with a total of 8.04 million ETH deposited into Ethereum 2.0, and the network participation rate has remained above 96% in the past month.

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Source: beaconscan

This August, Ethereum successfully completed the significant London upgrade, improving the trading fee market. As of now, over 744,000 ETH have been burned. On the other hand, Ethereum-based Layer 2 solutions such as Rollups have also developed very rapidly. On November 3, according to L2BEAT data, the total TVL on Ethereum Layer 2 reached $4.94 billion, hitting a record high. Among them, the scaling solution Arbitrum has the highest TVL, accounting for 59.21%. The progress of Layer 2 technology has become the key to solving Ethereum problems before the launch of shard chains. In the future, Ethereum will have Layer 1 focusing on decentralization and Layer 2 handling scaling and innovation, working together with a two-pronged approach to improve the Ethereum network experience.

So as both processes progress smoothly, in the upcoming public chain competition, who will come out ahead: Polkadot's parachains or Ethereum 2.0?

2, Polkadot VS Ethereum 2.0

We need to first understand the similarities and differences between Polkadot and Ethereum 2.0.

In terms of project background, both Polkadot and Ethereum have technically strong teams and technical backgrounds, so we won't go into detail here. One is the world's advanced smart contract platform, and the other is a platform for future multi-chain interoperability. Both platforms are designed for developers to build decentralized applications and are pursuing scaling strategies based on parallel execution to solve blockchain network performance and scalability issues. Specifically in structure, each execution thread is called a shard in Ethereum 2.0, and a parachain or parathread in Polkadot.

Polkadot is a scalable heterogeneous multi-chain blockchain . To achieve the cross-chain vision, it designed a "Relay Chain + Parachain" dual-layer structure. Through this structure, Polkadot can transmit data to all blockchains , achieving the circulation of assets and data between various chains. Polkadot's parachains are equivalent to shard chains, responsible for processing various transactions, and then interconnecting through the Relay Chain.

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Ethereum 2.0 is a hard fork upgrade planned by Ethereum during the complete transition to the Serenity phase. It will mainly improve performance through three technical means: sharding, Proof of Stake (PoS) consensus mechanism, and new EVM, among which sharding technology is relatively key. Ethereum 2.0 splits the Ethereum network into multiple shards (supporting up to 1024 shards), thereby increasing Ethereum's execution capability by a corresponding multiple. As the data layer , each shard is a sub-network, equivalent to Polkadot's parachains. The Beacon Chain, as the coordination layer, is responsible for handling Ethereum 2.0's consensus and communication between various sub-shards in the system, which is equivalent to the Relay Chain in the Polkadot network.

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Eth 2.0 sharding diagram

It can be seen that Polkadot and Ethereum 2.0 have some similarities in overall architecture, but there are many differences at the detail level. From the structural diagrams of both above, we can see that Polkadot is a framework for interconnection between different systems (parachains), while Ethereum 2.0 is a framework for interconnection within the same system (each shard). Ethereum 2.0 focuses more on itself, building a powerful underlying system to support more dApp ecosystems, while Polkadot focuses on connecting other chains to create a multi-chain interoperability system.

In addition, another major difference lies in their design goals and consensus mechanisms. Polkadot's goal is to achieve cross-chain , horizontal expansion through parachains, helping people build and integrate blockchains, thereby solving performance throughput issues. Ethereum 2.0's design is basically aimed at its performance and throughput issues. In terms of consensus mechanism, Ethereum 2.0 uses the PoS mechanism, while Polkadot uses the NPoS mechanism. The following is a summary of key differences between Polkadot and Ethereum previously compiled by Polkaworld for readers' reference:

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Source: Polkaworld

Since Polkadot's inception, many investors bullish on Polkadot believe that Polkadot has the grand vision based on Web3.0, and with the connection of parachains and cross-chain bridges, surpassing Ethereum 2.0 in the future is just around the corner.

3, Can Polkadot surpass Ethereum?

So, returning to the question we want to explore: Can Polkadot really surpass Ethereum in the future?

Undoubtedly, as public chain systems, both have their unique advantages and do indeed have a competitive relationship. Ethereum's biggest advantage lies in its mature and massive ecosystem and developer community, and it has already secured the throne of public chain leader. As the largest smart contract platform in the current blockchain field, Ethereum has significant network effects. The DeFi, NFT, and GameFi crazes we're familiar with were all launched on top of Ethereum. Against this backdrop, ETH as the underlying token has also captured enormous economic value. Therefore, from the current network infrastructure perspective, Ethereum inevitably has the upper hand.

But on the other hand, the scalability challenges and high gas costs facing Ethereum have become shackles to its development, while also providing opportunities for other public chains to overtake. Therefore, more and more new quality projects choose to build on Polkadot, pursuing higher trading throughput and higher decentralization attributes. Substrate-based parachains can not only design their own chains but also have their own economic models, and can enjoy these four characteristics (advantages): uninteruptible, upgradability, no restrictions, and no transaction fees. Here we must also mention the centralization difference in on-chain governance between Polkadot and Ethereum. Polkadot can react quickly and upgrade rapidly. Any new technology or proposal can be added to the Polkadot chain, and all are executed by community voting. But on Ethereum, although proposals can also be publicly created and submitted, the final decision is handed to the core development team for review and voting.

According to Polkaproject data, there are currently hundreds of applications and protocols in the Polkadot ecosystem, covering cryptocurrency wallets , validators, forums, browsers, and various Substrate-based projects such as privacy, bridges, DeFi, smart contracts, and more. Therefore, Polkadot's current "threat" to Ethereum mainly comes from competing for quality projects in the ecosystem, including at the infrastructure level. Even Ethereum core developer Afri Schoedon said early this year that Polkadot's development process is faster than Ethereum's, even stating that Polkadot brings what Ethereum's Serenity phase (final stage of hard fork upgrade) can bring. Thus, Polkadot's advantages cannot be underestimated.

Polkadot's biggest advantage lies in the development tool Substrate. Substrate is a development framework for creating Polkadot-compatible blockchains, supporting developers in rapidly developing a blockchain in a short time, greatly reducing the cost, time, and effort required to create blockchains.

In addition, its "Relay Chain + Parachain" dual-layer structure can provide powerful network security and very strong scalability. Not only can various blockchains run on Polkadot, but in the future it can also connect with Bitcoin and Ethereum. After achieving cross-chain interoperability with these mainstream blockchains, this will be a huge advantage for Polkadot. From a technical perspective, Polkadot has a leading advantage. Once the parachain system operates smoothly, it will open up a brand new cross-chain era for us.

In summary, although Polkadot and Ethereum are competitors, their ultimate visions are different, so there's no need to get caught up in whether Polkadot will surpass Ethereum. The arrival of Polkadot parachains and Ethereum 2.0 will both bring better experiences and upgrades to blockchain. In the short term, Polkadot surpassing Ethereum may still be some distance away, and it's expected that both will continue to exist in a state of multi-chain coexistence, long-term competition and symbiosis.

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