Polkadot is a decentralized exchange platform developed
in 2016 by the Web3 Foundation, which is based in Switzerland’s Crypto Valley.
The network was developed by the Parity Technologies project with Dr Gavin Wood
as its director.

Gavin Wood Parity, who co-founded Web3 and Parity
Technology, is also one of the founders of Ethereum. He has a PhD in Software
Engineering.

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The Polkadot project is one of the most high-profile initial coin offerings (ICO) in history. It raised around 145 million USD in a fundraising round in October
2017 or about 500,000 ETH at that time. It was mandatory to pass through a
strict verification procedure to invest in the project.

The interoperability and scalability of the projects make
them highly successful. Due to the use of parachains the growth of the system
becomes unlimited. Polkadot’s network enables blockchains with different
consensus models to communicate through dedicated intermediaries, without any
action required from the developers or users of these blockchains.

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The project aims to develop a fully decentralized
Internet 3.0 based on Web3. The system will also integrate public and private
networks and databases, as well as all other technologies found on the new
Internet. Moreover, the platform can be connected to an unlimited number of
blockchains and services.

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Polkadot platform and technology

Polkadot’s network appeared in the third quarter of 2019,
three years after the project was conceived. It has created a protocol that can
combine third-party blockchains and decentralized databases. Polkadot has
created an ecosystem where many blockchains can exchange data, including
transactions, with each other. The Polkadot system itself acts as a connecting
glue for control, interoperability, and scalability. Polkadot’s Relay Chain is
the Core Polkadot blockchain, and other blockchains known as Parachains are
connected to it by Substrate.

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DOT token

During the ICO, 5 million tokens were sold, and a total
of 10 million were issued. The DOT token has three main purposes. It was
created for control over the ecosystem, execution of transactions, and
communication. Tokens are needed to add new parachains, to bind tokens, to
remove old and unnecessary ones, and to remove bound tokens. This is a form of
a proof-of-stake algorithm.

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From collators to ordinary users, all network
participants can receive rewards for their contributions to the development of
the network. Penalties are imposed for actions that do not comply with
consensus algorithms. This system should ensure the reliable functioning of
Polkadot.