Author: Gavin Wood

Translation: Lin Ge

It's that time again… I've temporarily set aside the text editor I've been writing in for a whole year and opened Medium. The nights are getting colder, the days are becoming shorter, and the fire is lit; it's a great time to reflect on our ecosystem. How are we doing so far? What achievements have we made in the past 12 months? What will happen next? Buckle up, as this year's content will be lengthy because we've been busy and eager to make more progress.

Hello! The Christmas spirit is getting stronger…🎄

Before we start summarizing, let's take a look at the broader context of this year. The journey of Polkadot began with a white paper (2016) and a crowd sale event (2017). This largely determined the subsequent development direction and product vision. Over the past few years, we have focused on realizing the product vision outlined in the white paper. For various reasons and in various ways, 2023/2024 has become a watershed year, marking a significant shift in this core objective.

Thus, this year has been an important transformative year for Polkadot — shifting from focusing on achieving the limited scope of product goals outlined in the white paper to optimizing, enhancing stability, and refining products to better meet market demands. This transformation has also benefited from data collection and analysis support provided by Parity's DOT Lake and Token Terminal. Ultimately, we began to build a broader service platform framework that aligns more closely with Web3 needs.

I set the stage, you perform

Polkadot's core value proposition is to provide a large amount of high-quality, tightly connected block space, referred to as coretime in Polkadot. Currently, its main use is to support the operation of high-performance blockchains, which were previously known as parachains. Over the past year, we have finally seen preliminary cases of these projects utilizing Polkadot's high performance, introducing and serving large-scale non-crypto user bases. A notable example is the Mythical Games launched Mythos chain, which provides on-chain tradable NFT game assets and other services for mainstream large games.

The Mythos chain supports asset management for multiple games, including NFL Rivals, which has nearly 1 million active wallets and a user base of 5 million gamers on its platform. Just from this project, its NFT trading volume ranks second in the entire industry, showcasing Polkadot's ability to easily handle the demands of large-scale activities. As Mythical launches the highly anticipated FIFA Rivals next year and opens its chain to the entire gaming industry under a permissionless philosophy, more similar applications are expected to join.

Mythical is not the only team that sees Polkadot as a high-performance, resilient Web3 gaming platform. This year, DOTplay launched, aiming to provide resource support for teams building game-related projects on Polkadot. One of the first projects to benefit is Ajuna, which integrates Polkadot into the most popular game development framework, Unity.

In fact, the transaction volume on parachains has grown by about 300% this year, increasing from just over 10 million transactions per month to nearly 40 million transactions in November. The volume of on-chain events (another metric for measuring on-chain activity) has also shown a similar growth trend. Recently, Origin Trail 's Neuroweb performed particularly well, generating 200 million events and 14 million transactions last month, demonstrating Polkadot's capability to handle the high transaction volume required for global supply chain tracking.

Similarly, Frequency (a key component of Frank McCourt's Project Liberty) launched this year and supports 100 million users, currently processing about 10 million transactions per month. Phala, Litentry, and Mythos have also contributed significantly to the growth of Polkadot's total transaction volume, reaching a scale of 40 million transactions per month.

As noted in a recent report by Electric Capital, Polkadot's SDK remains among the top three in terms of open-source developer activity in the blockchain tech stack. Of course, this does not include EVM-based development on platforms like Moonbeam and Phala within the Polkadot ecosystem, nor does it account for some closed-source JAM implementations. If included, these additional 100+ developers could further enhance Polkadot's ranking.

You can't fully trust humans

In the mission to realize the true Web3 vision, decentralization has always been a crucial core concept for Polkadot to enhance resilience. Since its launch, Polkadot's Nakamoto coefficient has consistently performed impressively, and in 2024, this value has increased from 93 at the beginning of the year to 132 now, making Polkadot the first major blockchain network to achieve a score above 100, with a level of decentralization four times that of the second-ranked network. In comparison, most PoS blockchains have Nakamoto coefficients that do not exceed 20 (Solana's coefficient even dropped from 32 to 18), while Polygon and Bitcoin can be controlled by four collaborating entities, and Ethereum ranks lowest, requiring only two entities for control.

Perhaps this is not surprising. Some crypto projects, especially those relying on venture capital, focus more on "scaling up" (i.e., improving performance and profitability), chasing market trends and selling tokens, often viewing long-term resilience, governance, and decentralization as irrelevant accessories.

At the end of 2023, some significant changes occurred at Parity. The Web3 Foundation strategically adjusted its functional model, deciding to reduce functions and personnel. Instead, it adopted a more streamlined and focused model, prioritizing core technology development, important tools, and metrics delivery, while leaving content, business development, and applications to the community. To support this strategy and minimize the impact on projects, the "decentralization" plan was born, aiming to provide maximum opportunities for community members who can take responsibility. The Web3 Foundation's $60 million "Decentralized Future" plan will officially launch in the first half of 2024.

Many individuals in the ecosystem are actively participating, and an increasing number of independent and successful teams are emerging within the Polkadot ecosystem, delivering valuable products and services. One noteworthy example is WebZero, an event organizing team. They successfully took over the brand of the Sub0 developer conference and launched a refreshed and highly attractive Reset conference in Bangkok in November.

Sub0 Reset is by no means the only impressive event this year. Earlier this year, we held another popular Sub0 conference in Bangkok. The flagship event Decoded returned to Brussels this summer and achieved great success. 2024 will also mark the return of the Web3 Summit after five years, retaining its slightly "rebellious" atmosphere and its highly regarded venue — Funkhaus in Berlin.

This year also saw the inaugural Gray Paper lecture tour, a university lecture series on the JAM protocol and its official specification Gray Paper, which I led. The series covered eight locations across four continents, including a seven-hour marathon lecture in collaboration with the Polkadot Blockchain Academy at the National University of Singapore (NUS).

In addition, another successful spin-off project from Parity this year is the Polkadot Blockchain Academy (PBA). This is an academic-level, in-person course project taught by some of the best members of the Polkadot project. Over the past year, the focus of PBA's curriculum has shifted from the specific implementation details of Polkadot to the fields of smart contracts and governance, with increasing collaboration with the BlockchainGov collective. Today, PBA has fully become an independent project and launched PBA-X, aimed at moving the high-quality teaching content of the original PBA courses online, making it accessible to a broader audience.

Polkadot, as popular as Coldplay

Parity is not the only example showcasing decentralization: Polkadot's governance system continues to be the largest and most complex DAO in history. Unlike vague decision-making systems or worse, centralized decision-making and development, one point of pride for Polkadot is that it is the only major network where all protocol decisions are made in a transparent, accessible, and resilient manner. (And it continues to deliver significant updates.)

In fact, in addition to the daily and monthly upgrades through governance, 2024 marks the year when DOT holders can guide core developers in a more direct and proactive manner through the newly established "Wish For Change" governance channel. A notable proposal is the #682 referendum, which officially identifies JAM as the technological solution to replace the relay chain in the future, passing with a support rate of 99.998% (with only four accounts voting against it).

Under the management of OpenGov, approximately $120 million in assets are controlled by DOT holders, with spending this year being roughly the same. OpenGov initiated an astonishing 1,350 referendums. With the enhancement of the voting delegation feature, we have seen an increase in the amount of DOT involved in each proposal's decision-making and the average voting strength. More and more people are willing to lock up more DOT to make their voices heard in network decisions. For more information, refer to the year-end report compiled by Parity's DotLake team. https://data.parity.io/opengov_report.pdf

A major democratic event for Polkadot this year was the DOT issuance rate vote. At the network's launch, the annual issuance rate of DOT was 10%. This issuance fund is used to reward stakers (the pillars of network security), while a portion of the variable funds is allocated to the treasury to fund ecological activities deemed valuable by DOT holders. This year's vote fixed the issuance at 120 million DOT per year, meaning that the DOT issuance in 2025 will decrease from over 150 million to about 120 million. Of this, about 100 million DOT will be used for staking rewards, and the remaining portion will fund the annual treasury budget. With the issuance rate fixed, the base inflation rate relative to the overall network issuance will gradually decrease: DOT has now entered a deflationary mode.

The Polkadot Fellowship, as the main expert organization of the Polkadot protocol, has nearly 100 members, doubling since its establishment in mid-last year. These organizations (like the Fellowship) can now use their own treasury to pay for projects and expenses. One feature I personally looked forward to this year has finally been realized: the multi-asset treasury, which allows the network treasury (or any sub-treasury) to hold foreign currency reserves. Currently, the Polkadot network holds not only DOT but also a significant amount of USDC and USDT (not to mention "DED" 😂), and regularly uses Hydration to automatically trade currencies, typically paying treasury expenditure proposals in stablecoins. We are now ready to have a fully autonomous Polkadot sovereign wealth fund. Additionally, the Fellowship can now autonomously manage monthly salary payments and pay in USDT.

This year we witnessed the gradual formation of the first "alliance" aimed at Polkadot ambassadors. Its declaration was collaboratively edited and publicly discussed by members, which may provide a template for similar governance bodies in the future. Proposals have already been made to establish a user interface fellowship and a secretaries fellowship. Combining their respective treasuries, budgets, and salary systems, we are gradually seeing the seeds of a complex, transparent, and autonomous "public service system" sprouting.

Anything is possible

Like a phenomenon existing in a virtual plane, operating autonomously in a decentralized world can sometimes seem inconvenient: interacting with the traditional, materialized, centralized world can present many difficulties. For instance, simple tasks like paying rent or subscribing to a service can become very cumbersome if shortcuts are not taken and reliance is placed on the founding company to handle them. Because of this, 2024 saw the birth of a new type of entity: Polkadot Community Foundation (PCF).

PCF was established in the Cayman Islands, and all its activities are directly guided by DOT holders through the OpenGov system. PCF serves as an adapter to the centralized world, executing tasks such as signing commercial contracts, making fiat payments, protecting intellectual property, and hiring third-party service providers (like consultants). Unlike organizations such as the Web3 Foundation, PCF has no assets, shareholders, members, trustees, or beneficiaries, and its interests or opinions do not necessarily represent those of token holders.

Therefore, PCF does not have to be the only entity of its kind. Parity's efforts in researching and designing the PCF structure have created a template that other truly decentralized projects can reference to help them connect to the centralized world.

Operating as efficiently as a "power loom"

When some networks attempt to improve (some absurd) TPS (transactions per second) metrics by raising node hardware requirements or adding complex optimizations, it often leads to questions about the network's decentralization and resilience. In contrast, Polkadot (specifically Kusama) demonstrates the true performance of a network by scaling its size. By distributing workloads on consumer-grade node hardware, we free ourselves from the limitations of single-machine computing power or the speed of result sharing between validators.

A test event called "Spammening," organized by Amforc and funded by the treasury, took place live on the Kusama network in December. This test showcased the extreme performance of the Kusama network in a real-world environment (shoutout to Jay!). As the first truly decentralized network with value, Kusama achieved a sustained rate of over 100,000 transactions per second (actually reaching 143,343 TPS) while using only a quarter of Kusama's core computing resources. Although there is still room for network and computing optimization, our goal is clear: even if you are "only" pursuing performance, Polkadot is the best choice. (Moreover, you can enjoy top-notch resilience, multi-chain connectivity, and the flexibility of modular blockchains as added benefits!)

Cross-chain interoperability is like building with Legos

Over the past 12 months, Polkadot's cross-chain interoperability has significantly improved. Chains hosted by Polkadot can now interact trustlessly with Kusama and other independent Substrate chains through the Substrate Bridge, connect to Ethereum via Snowbridge, and link to multiple industry networks through Hyperbridge. By supporting the transfer of XCM across these networks, Polkadot is gradually realizing the goals outlined in its vision white paper.

Unlike other bridging mechanisms, Polkadot's bridging mechanism is completely trustless and programmable, not placing the assets transferred across chains under the control of a few (often irresponsible) stakeholders, nor limiting them to specific hard-coded functionalities.

In practice, this means that the connections between blockchains on Polkadot and other networks like Kusama and Ethereum can inherit the rich programmability of XCM. Token transfers are just the tip of the iceberg: it also enables transaction execution without temporary accounts, data publishing, attribute querying, fee payments, message forwarding, and smart contract calls.

XCM underwent significant revisions this year, no longer merely pursuing functional delivery but focusing on addressing the core pain points of Polkadot users. Through prioritized optimizations for system chain message relaying and fee transparency, the cross-chain interaction experience has become more coherent and powerful. As the Polkadot wallet ecosystem continues to improve, user experience has also significantly enhanced, allowing them to gradually become unaware of the complexities of cross-chain transactions.

On the eve of this article's writing, Harbour Capital partnered with Polkadot's Velocity Labs to launch the Magic Ramp service. This service provides a top-notch experience for users looking to transfer funds between the banking system and Polkadot, supporting direct transactions in USDC and euros from bank accounts. Currently, the service is only available in Europe, with further expansion expected in 2025.

This powerful system, which combines trustlessness, programmability, performance, and new connectivity, along with the effective utilization of service chains like Polkadot Hub, Hydration, and Polkadex, gives Polkadot the opportunity to become a central hub for cross-chain interactions in 2025, seizing this unique market opportunity.

This application is truly addictive

In 2024, the overall user experience of Polkadot has significantly improved. Transferring funds and NFTs between chains, managing multi-signature and proxy accounts, and participating in governance through delegation have become increasingly simple. We have noticed that wallet applications are gradually avoiding making users directly aware of the complexity of the multi-chain Polkadot ecosystem, instead integrating token balances and NFTs within the ecosystem to provide a more consistent user experience, where the ecosystem is merely "coincidentally" distributed across different chains. The Subwallet, Talisman, and Nova teams continue to improve their products, with Nova going a step further by implementing a universal trading system that routes funds to the best chain, securing the best trades for users. This combination of high-quality UI, XCM, and parachain logic is outstanding.

Another project benefiting from the "Decentralized Future" initiative, which has been widely discussed within the community for weeks, is Polkadot App. As Björn mentioned at the Decoded event, this application is designed to simplify user entry into Polkadot, avoiding all complexities and focusing on providing core functionalities for the mass market while discarding everything else irrelevant.

This application is a simple, user-friendly non-custodial wallet that supports DOT, KSM, and USDT/C. By utilizing native iOS/Android features to protect and back up keys, it avoids users falling into "mnemonic hell." It also integrates a username registrar, ensuring that each user can obtain a memorable name to receive funds, and supports one-click staking through Polkadot's staking pools. Transfer fees are almost negligible and can be paid in stablecoins, combined with fiat on-ramps like Magic Ramp, making this application a highly flexible decentralized payment system.

Most impressively, it integrates Polkadot Pay as a payment channel, allowing users' wallet funds to be used directly to pay for goods and services at millions of stores and merchants across the United States. Moreover, unlike other crypto payment solutions, this application not only eliminates credit card transaction fees but also rewards users with incentives for every purchase!

As easy as a Sunday morning

In 2024, Polkadot is accelerating its transition from traditional technologies to more advanced ones. The use of Polkadot's light client Smoldot is becoming increasingly common, and the PolkadotAPI and Substrate Connect projects are gradually gaining recognition within the ecosystem. As a result, new projects like Kheopswap are increasingly inclined to use these new, more resilient tech stacks rather than relying on Polkadot.js, which has poor support for light clients. Kudos to the independent developers behind these successful projects!

Parity is also promoting two important initiatives this year aimed at making the deployment of Polkadot SDK blockchains closer to the convenience of smart contracts. Among them, the Omninode initiative, released as part of the Polkadot SDK's December update, introduces a single-node binary file that can synchronize and aggregate almost all networks built on the Polkadot SDK. This greatly reduces the focus areas for teams when developing, deploying, and maintaining chains, paving the way for chain hosting services (like Zeeve's Perfuse system), making chain deployment and maintenance as simple as smart contracts!

While Omninode reduces the complexity of node-level programming, maintaining business logic on the chain (the so-called runtime) can still be a challenge. Although the Polkadot SDK has led the trend of modular blockchain SDKs with its astonishing development speed (even teams like Polygon's Avail and Cardano's Midnight have adopted it to build projects), the API instability resulting from rapid iterations has created a significant workload for downstream developers, and the demand for stability has long been urgent. In 2024, the Polkadot stabilization plan successfully addressed this issue, setting a strict timeline for the release of runtime elements of the SDK. Major changes (such as allowing the use of ZK proofs instead of transaction signatures in the new Transaction Extension API) can only occur in major releases once per quarter. This way, teams building cutting-edge Polkadot SDK chains can enjoy a three-month development stability period, requiring only one code upgrade per quarter. For teams willing to forgo the latest features, the long-term support version now offered ensures security and compatibility within nine months.

Polkadot 2: A revolution that started with a simple contract

Over the past year, the original Polkadot platform has undergone a significant evolution, which is now nearly complete. While parachains (Polkadot's secure high-speed Rollup technology) were a key element of the initial Polkadot product proposition (also granting utility to DOT tokens through slot auctions), the engineering value behind them far exceeds this product. The engineering work of the past three years has laid the foundation for a high-performance "world computer" and taken the first step towards our broader goal—a goal that was clearly mentioned in the 2016 Polkadot white paper: to provide a platform capable of bringing Web2 applications into the Web3 world, achieving resilience, trustlessness, and thereby delivering a real and credible experience. To distinguish this evolutionary vision from the original Polkadot product, we as a community collectively decided to name this new vision, thus Polkadot 2.0 was born.

This new understanding was not proposed by any one person or even any one company, but is the result of countless voices within our community working together, further demonstrating Polkadot's strong resilience and decentralization capabilities. Polkadot 2.0 is a combination of deep upgrades to the technical core, key new features, and a new conceptual framework, through which we can better understand the value of Polkadot. In this vision, Polkadot's success is divided into two main goals: on one hand, improving its community, and on the other, maximizing the utility of Polkadot's original product coretime. All upgrades, features, and conceptualizations are aimed at achieving these two goals.

A dual approach

One of the "three major" upgrades launched in 2024 is Asynchronous Backing, an optimization that runs throughout the Polkadot tech stack, introducing pipelining technology into the process of providing security for new parachain blocks. With this optimization, the two independent functions of the Polkadot security system—correctness assurance and data availability—can occur simultaneously, reducing the standard block time from 12 seconds to 6 seconds.

With this change, we also increased the time for the correctness assurance phase by about 400%, resulting in an overall throughput increase of about 10 times for blockchains hosted by Polkadot 2.0 compared to Polkadot 1.0. This significantly enhances the transaction capacity of Polkadot-hosted blockchains and greatly reduces the cost of each transaction within the ecosystem, making Polkadot a more attractive platform for building and deploying blockchain projects.

The secret ingredient is time

The second upgrade is called Agile Coretime, which replaces the staking, leasing, and crowdloan systems in Polkadot 1.0. The new system introduces a simple monthly auction mechanism, where each of Polkadot's 45 cores can be bid on by anyone in an unpermissioned manner each month. Coretime can be split, interleaved, and transferred, and can even be shared among multiple chains to achieve custody in a trustless manner. There are already dedicated exchanges and integrated services on Polkadot, such as RegionX, Lastic, and Perfuse, for trading and acquiring coretime.

The transformation of Agile Coretime changes the utility of DOT tokens; crowdloans and staking auctions have been abolished, replaced by a highly flexible market that allows consumers to respond quickly as needed while maintaining cost predictability. This adjustment in the economic model fully demonstrates that Polkadot, even with its high degree of decentralization, still possesses the willingness and ability to adapt to changing environments.

A new era of multi-core scaling

As the Polkadot ecosystem's chains are no longer limited to the old "one parachain corresponds to one slot, one core" model, this year has opened up more possibilities for the use of Polkadot coretime. Short-cycle chains have become possible; on-demand operating chains have become possible; chains sharing coretime have also become possible. However, perhaps the most interesting development direction is multi-core scaling, which will be pioneered by the new Polkadot Hub: a high-frequency, high-performance chain that utilizes multiple cores to run simultaneously to increase transaction volume and reduce latency.

By utilizing three cores, the Polkadot Hub's operating speed will reach three times that of the Polkadot relay chain, confirming a complete block every 2 seconds instead of the usual 6 seconds. This triples the data and computational bandwidth, providing an unprecedented upgrade path for teams focused on future scalability. There are even higher frequency attempts, such as Basti (a Fellow at level six) testing the first 500-millisecond Substrate chain, which generates blocks at a rate 12 times that of the current chains.

Even more excitingly, in 2024, Elastic Scaling was developed and is planned for deployment in 2025. This technology further enhances the paradigm of multi-core scaling, allowing chains to operate at low costs during low usage and dynamically scale during peak usage by acquiring more core time and confirming blocks more frequently, flexibly responding to changes in demand.

More than a superficial definition

The technological transformation of Polkadot 2.0 clearly helps maximize its utility, but perhaps equally important is the conceptual work that enables us and everyone interacting with Polkadot to better understand its functions and value.

This year, a new conceptual framework was proposed and discussed by Shawn Tabrizi (a Fellow at level six). Polkadot traditionally avoids defining itself as a cryptocurrency or blockchain, instead opting to present itself through the narrative of a multi-chain ecosystem. This definition was reasonable under the initial parachain-centric product proposition. However, defining Polkadot solely in these terms can lead to a limited perspective, overlooking the potential value above and below the parachain layer. This narrow definition obscures strategic direction and makes it difficult to discover or explain certain paths to value creation.

The Hub/Cloud dualism serves as an alternative narrative to the "parachain community" narrative, helping us focus intellectually and market-wise on Polkadot's true core value proposition. This metaphor, as a conceptual framework, aids us in better understanding how all the work, functions, ideas, and developments of Polkadot in the past, present, and future fit together, ultimately making Polkadot more relevant in the market and the world.

This metaphor divides Polkadot into two symbiotic product parts: one centered around the unstoppable computational resources generated by Polkadot validators and their protocols. This is referred to as the Polkadot Cloud, supporting the initial Polkadot parachain products. The other is the Polkadot Hub, characterized by services based on various system chains (which are built on top of the original product). Although the two are symbiotic, both products have independent utility, and their usage fees are paid in DOT.

Specifically, the core of the Polkadot Cloud is currently core time (coretime) and all its potential uses. Hosting chains based on the Polkadot SDK (i.e., parachains) is the first significant use case for core time, and Parity plans to launch additional use cases in 2025. Once the Polkadot Bulletin chain and Small-Statements Hub go live, its cloud services will expand into the data distribution domain. Additionally, the JAM protocol fits this framework very well, as its core time is inherently more useful than the core time of the relay chain, immediately enhancing our cloud service capabilities and integrating all services on the JAM supercomputer.

On the other hand, the Polkadot Hub is essentially a convergence point for community and direct interaction. It provides a highly consistent and often synchronous platform for collaboration and combination for people, teams, and their logic. The core of the Hub is the Plaza project (proposed this year by Fellow Rob Habermeier at level six), which is an advanced, Polkadot-native, permissionless, low-cost, and fast smart contract system. All functionalities on the official Polkadot chain will be conveniently provided within the hub, including staking systems, governance and collectives, identity and personhood, all tokens and NFTs, and all cross-chain bridges. Most of these functionalities can be synchronously combined with smart contracts.

The Polkadot Hub achieves the unification and optimization of the overall Polkadot experience, eliminating the fragmentation issues caused by directly exposing different system chains to users, which has long been a pain point for Polkadot. The Hub is supported by three cloud cores, with a block time of 2 seconds, three times the performance of a single-core chain, and about 30 times the performance of last year's parachains. To further enhance performance, the smart contracts on the hub are based on PVM, supported by the high-speed PolkaVM developed by Fellow Jan Bujak, achieving execution speeds of about 45% of native execution speed, significantly faster than EVM interpreters.

Although the Hub's smart contracts are represented in PVM code (a derivative of the well-validated RISC-V ISA), they do not need to be written in a specific language. In fact, the hub is fully compatible with conventional Ethereum development toolchains, including the Solidity language, deployment systems, and Metamask. Additionally, Hub contracts can also be written in Rust, ink!, C, C++, or almost any language supported by a compiler. Through PolkaVM, the Hub's cross-chain bridging, and the security of the cloud, users can achieve remarkable Ethereum performance enhancements from Polkadot without leaving the Ethereum ecosystem.

The Hub aims to compete with the fastest pseudo-decentralized synchronous chains in the industry, making performance crucial. This year, improvements have been made to the network stack, which will be put into use next year. The high-performance Merkle Trie system NOMT introduced this year by Fellows Sergei (V Dan) and Rob provides a further optimization path for the hub, with performance improvements of over an order of magnitude. At the same time, experiments for faster block times are also underway, further enhancing performance multiples.

This month, the Westend testnet has launched a preliminary test version of the Hub chain, equipped with Ethereum-compatible smart contract functionality. A formal launch is expected in 2025.

Hidden Crisis

As our social interaction patterns increasingly root themselves in the digital realm, often text-based, generative AI poses a truly unique threat to the structure of the free world. The proof-of-personhood mechanisms from the Web2 era, such as CAPTCHAs, email/SMS verification, and even government-issued IDs, are gradually becoming victims of generative AI and malicious forces. In a recent election, at least 66,000 independent accounts were found to be controlled by a single stakeholder, who also had 10 million followers. While the old saying goes, "Truth is not determined by majority vote," modern (social) media almost entirely relies on popularity to distinguish truth from falsehood. Some false information, if it appears to have strong support, is enough to convince many people, significantly distorting the democratic process.

In the civilization we believe we possess, the ability to resist AI will become increasingly important to avoid another wave of de-democratization and the concentration of power in the hands of a few entities. Ignorant helpers, greedy corporations, and arrogant maniacs are forming a troubling alliance. The only antidote can come from our collective efforts.

To empower people with a real and honest voice, Web3 technology is absolutely essential. However, relying solely on blockchain (even a resilient and high-performance blockchain like Polkadot) is not enough: we need to algorithmize the concept of "personhood." Furthermore, we must achieve this goal without fundamentally undermining the core values of Web3, especially the protection of individual privacy.

Therefore, we proposed the vision of Proof-of-(Polite-)Personhood earlier this year. This computationally intensive logic is hosted by Polkadot but leverages Polkadot's ultimate trustless connectivity (provided through Snowbridge and Hyperbridge), allowing this service to be used throughout Web3 and even extend into Web2.

The mechanism will be rolled out in at least three phases, referred to as DIM1, DIM2, and DIM3 (DIM stands for "Digital Individuality Mechanism"). Polkadot's Po(P)P is a foundational and uncompromising Web3 individual system designed to avoid any form of centralization or privilege, using the latest ZK technology to protect privacy and being open and transparent to anyone for auditing. It is expected to be gradually launched in 2025.

Polkadot 3.0: Can you stop Jamming?

While our Hub and Cloud paradigm forms the basis of Polkadot 2.0, it also provides a conceptual framework for understanding the next chapter of the Polkadot journey, which is the transition from the relay chain to the JAM protocol. JAM is the foundation of the next generation of Polkadot cloud services.

In 2024, the initial version of the JAM protocol will be released in the form of a Gray Paper, coinciding with the tenth anniversary of the Ethereum Yellow Paper's release. Similar to Ethereum's Yellow Paper, JAM is also a permissionless "world computer" protocol, but unlike Ethereum, JAM not only possesses resilience but also high performance. It is expected to have hundreds of computing cores and approach 1 GB of data I/O per second, aiming to become the first true Web3 supercomputer.

The Gray Paper has undergone multiple revisions and is now close to a stable version, with the current version being 0.5.3. It is expected to complete the 0.5 series at the beginning of the new year, with a target version of 1.0 in the first half of next year. Unlike the Polkadot relay chain, which has only one main implementation (and two secondary implementations with limited functionality), there are currently 35 teams building JAM implementations using 15 programming languages. Their code is not yet public but is expected to be released next year. They are incentivized by the JAM Implementation Award, which is the largest programming bounty in history, totaling tens of millions of dollars.

Similar to the current Polkadot, JAM is not only decentralized but also has a distributed architecture. We achieve performance by scaling the network, which is an emergent effect produced by the collaboration of multiple nodes. Unlike the direct effects of centralized and highly synchronized systems, optimizing for emergent effects is more challenging from an engineering perspective. As such systems continue to grow, the emergent effects become deeper and more complex; for example, unexpected emergent behaviors like performance degradation become extremely difficult to predict, diagnose, and fix, making optimization particularly challenging.

Therefore, this year we initiated the first attempt in the industry: we are building a small supercomputer with 16,000 AMD Threadripper cores, a total of 16 GB of L2 cache, 32 TB of RAM, and 20 PB of storage. With this hardware, we can deploy a full-scale JAM network and conduct in-depth testing and optimization of the protocol and its implementations using debugging and analysis software to ensure that the theoretical predictions of a globally scalable network align with actual performance.

This project is called the Testing, Optimisation, Analysis and Scale-Trial Experimentation Rig (JAM TOASTER 🥲). Currently, the first phase of the project is halfway complete and is expected to finish at the beginning of the new year; the second phase is planned to start in the second half of 2025. As a small highlight, this device will be located in the basement of the Polkadot Palace and will use the palace's hot tub as a cooling system. Well, that's quite warm!

Now it's time to get to work

So what about building applications on JAM? Our first target demonstration is DOOM-on-JAM, which, as the name suggests, aims to run the classic game DOOM on JAM. This will execute the game through a consensus mechanism and output video frames as images into our vast data lake. To achieve this, we need a service capable of hosting an unlimited virtual machine, meaning this virtual machine can execute any code you are willing to compile without being constrained by annoying limitations such as block gas limits or the need to use special primitives, languages, or programming techniques. This is a first in the blockchain space, making it truly Turing complete. This JAM service is codenamed Alpha and is currently in intense development.

Another important project to be advanced in 2025 is migrating the logic currently embedded in the Polkadot relay chain runtime to an independently upgradeable JAM service. This paves the way for the Polkadot JAM chain to replace the current Polkadot relay chain as the hosting structure of the blockchain ecosystem. Over time, the Polkadot blockchain hosting service (codenamed Beta) will expand its functionality to include new JAM-specific features for blockchains, such as Accords (allowing trustless interaction between two sovereign blockchains) and dynamic metering (to avoid benchmarking in most cases).

To showcase JAM's unique transaction capabilities and provide a solid use case for optimizing the JAM protocol, we plan to create a simple payment system on JAM. The project, codenamed Mu, will prototype a low-latency, high-throughput multi-currency payment system, aiming for a sustained rate of one million transactions per second across multiple cores on JAM.

Finally, the Lambda project will combine elements of Alpha and Mu to build a highly scalable actor model-based system using a dynamic state partitioning approach to highlight and validate JAM's highly scalable, fundamentally consistent computing model. In 2025, Parity and other teams will initiate the design and delivery of these services.

A strong sense of fear

Recent news has brought advancements in quantum computing into collective focus. Google recently announced that its project Willow has achieved significant milestones, particularly in error correction capabilities. Although we are still far from truly useful applications, this indeed addresses a major obstacle on the path to realizing useful quantum computing devices.

In the strictest sense of "code is law," one of the first "useful" functions that quantum computing devices might achieve is recovering private keys from public keys (and not necessarily with the device controlled by the key's owner). This would clearly undermine many foundational services of Bitcoin, not to mention Ethereum, Polkadot, and almost all other cryptocurrencies.

Fortunately, the JAM protocol does not rely on transactions but primarily depends on PVM-based authorizers and game-theoretic mechanisms, allowing it to easily transition into a fully quantum-resistant protocol. By 2025, our researchers are expected to release a report detailing the specific protocol changes needed to achieve complete quantum resistance.

This is explosive

We can think of JAM as a "crypto-economic silicon chip" that transforms the raw materials of economic value and real-world computational resources into a supercomputer that is uncontrollable in the real world but equally uncontrollable in the internet world.

As long as there is a JAM network backed by DOT tokens, there is only one such supercomputer, which we call the Polkadot Supercomputer. This forms the foundation of Polkadot 3.0. If you understand any part of JAM, this is probably the core of its vision.

The expected performance of the Polkadot Supercomputer is astonishing by current industry standards and even impressive for the future. However, compared to the valuable transactions occurring among institutions within the current global Web2 system, it is still insufficient. If Web3 is to become a viable direction for the world, it needs to far exceed current performance support, and this additional performance cannot compromise the prospects of state consistency, nor can it come at the expense of resilience or universality. (Clearly, this logic indicates that fully synchronized, highly consistent system designs like Solana are a dead end for Web3, as they can only "scale up" and cannot "scale out," with their logical endpoint being a centralized supercomputer.)

In short, we need a viable long-term (5 years) plan that allows Polkadot services to run not only on a JAM-driven supercomputer but also on multiple — or even many — supercomputers.

Borrowing from Delenn's words about the White Star ships in "Babylon 5," the Polkadot Supercomputer was never meant to be the only one; it will just be the first. The goal of the Polkadot Cloud is to have multiple such JAM supercomputers, forming a JAM Grid. While the security of the grid is guaranteed by the same DOT staking security mechanism, each JAM hosts its own services. Just as a single JAM creates an uncontrollable supercomputer, the JAM Grid transforms similar resources into a tightly integrated cluster of supercomputers… also uncontrollable by anyone in the internet world. This is a crucial component of the future Polkadot Cloud.

The design of JAM services is divided into two parts: an asynchronous, almost stateless Refinement part and a highly synchronized, fully consistent Accumulate part. This design ensures that services can be expressed in a way that can scale to the computational cores of JAM supercomputers. Even better, this design is applicable not only to core scaling within a single JAM supercomputer but can also be further extended to utilize the cores of other supercomputers in the JAM grid.

There are still some unresolved questions: how to transparently extend services beyond a single JAM? How important is a JAM's position within the grid? Is the data availability guarantee consistent across the entire grid? These questions will be further explored in the coming year as JAM 1.0 takes shape.

How great is the potential of the Polkadot Cloud? According to preliminary estimates, a grid composed of 10 JAMs could achieve over 1 Exabyte of data availability (DA), 600 GB/s of data bandwidth, and approximately 1 trillion EVM equivalent Gas/second of computational power.

From the perspective of raw computational capacity, this is enough to provide several times the current block space of the Ethereum L1 chain for every person on Earth, sufficient to handle not only each person's signature transactions but also their robots, actors, and devices. This is a necessary condition if we are to live in a digital world free from the control of proxy interests.

Alright, that's it for now! I have to run to the Londis supermarket

The year 2025 for Polkadot is now underway. As with all such summary articles, there are many noteworthy points that cannot all be included: for this, I extend my deepest apologies to all the projects and individuals around us who tirelessly work to help us realize a true Web3 future.

The future of Polkadot is bright. Whether it's apps, hubs, identity systems, DAO expansions, JAM, or deep, trustless, and seamless Ethereum integration, there is much to look forward to, providing everyone with limitless possibilities to build.

So, enjoy the well-deserved break, watch some nostalgic movies (Die Hard and Home Alone are my top picks), reflect on the points mentioned above, and come back next year to continue buidl buidl buidl, looking firmly ahead without looking back.

Happy holidays! 🎄

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