Gavin Wood: Polkadot Year in Review 2023
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Gavin Wood: Polkadot Year in Review 2023
Agile Coretime, On-Demand Parachains, Ethereum Snowbridge, and Kusama Bridge are four upcoming key infrastructures.
Navigating Web3 tides with focused insightsWritten by: Gavin Wood
Translation: 0xAyA, Odaily Planet Daily
As the nights grow longer in the northern hemisphere, the Christmas music special from soma.fm returns to my home radio once again, marking the time of year when I write Polkadot’s annual diary on its behalf. With the pandemic largely behind us and fading into memory, we can observe a global return to normalcy and a revival of in-person events. This year, conflict and artificial intelligence dominated news cycles, while some curious minds have also been wondering how these forces, alongside blockchain, might reshape the world.
This moment also marks a personal milestone for me—I am writing these words exactly ten years after I wrote my first line of code in cryptographic finance. So, what did 2023 bring?
Industry Activity
Given my position in this industry is now nearly that of a veteran, it seems to me we’ve developed a seasonal rhythm. Our new "crypto winter" has been underway for some time. Web3, or more precisely cryptocurrency, continues to appear in the news—but often under more negative framing compared to the optimistic headlines seen just a few years ago. (Indeed, one notably balanced commentary from The Economist likened it to an ancient pest—cockroaches.) While this crypto winter may have been inevitable, it was certainly accelerated by certain individuals who seemed to believe Web3 could be marketed and messaged independently of its underlying technology and culture. Sadly, this likely won’t be the last time we see such behavior in our industry, but we hope it serves as a constructive and instructive lesson for all.
I suspect these negative news reports and unfairly critical commentaries have likely reached the halls of power. At the same time, we’ve observed evolving regulatory landscapes across our sector—sometimes wisely, sometimes less so. Major shifts are happening globally, particularly in the UK, Switzerland, Japan, the EU, and the US. Some developments in the latter were likely noted by the Web3 Foundation, which has testified before the U.S. House of Representatives and advised Japan’s Liberal Democratic Party. Despite nuanced differences among jurisdictions, a clear and increasingly unified stance is emerging—one that strongly emphasizes avoiding trust-based custody and Web2-style “solutions,” instead insisting on genuine trustlessness and decentralization across shares, nodes, and governance. Fortunately, some forward-thinking regulators seem to recognize that not all cryptocurrencies are equal—even if this distinction is only implicitly acknowledged through omissions.
Polkadot’s Decentralization
Older Web3ers know, as stated in the Polkadot whitepaper, that decentralization has always been Polkadot’s top priority. Rarely do idealism and pragmatism align, but here they truly do: decentralization is not merely a goal worth striving for, but a conviction we must fulfill.
While much work remains to build a truly resilient, decentralized, and self-sustaining system within the Web3 space, Polkadot is ahead of the curve on many fronts. A recent independent report ranked Polkadot at the top of the Nakamoto coefficient—a metric measuring blockchain network decentralization. We also witnessed a decentralization milestone this year as Kagome, Polkadot’s relay chain implementation, joined the Kusama network as a validating node.
The push toward decentralization appears especially evident in recent structural changes within the Parity team. These efforts led to a significant reduction in executive staff, primarily in areas related to ecosystem activity support, while remaining largely unchanged in Parity’s core historical focus—core technology development. Behind this reorganization, the Web3 Foundation announced the launch of a $55 million “Decentralised Futures Fund,” explicitly aimed at helping our ecosystem further decentralize and reach a sustainable state where activities contribute to the utility and demand for Polkadot’s blockspace (Coretime). The fund became immediately active, receiving dozens of high-quality applications and will remain active through disbursements in the first half of 2024.
The Polkadot ecosystem continues to grow: across Polkadot and Kusama, we now host 90 parachains from over 580 ecosystem projects, including 300 decentralized applications and 190 blockchains built using the Substrate framework. Polkadot currently operates 50 activated parachain cores, securely exchanging around 17,000 XCM messages monthly between them. On December 22, a single relay chain among Polkadot’s 50 chains processed 6.9 million transactions within 24 hours—an average rate of 80 transactions per second sustained throughout the day. Today, we see over 2,000 active developers and 83,000 active users in the ecosystem each month. Nomination pools friendly to retail participants grew tenfold this year, encompassing over 10 million DOT across more than 180 pools.
Under the Web3 Foundation’s grant program, we received 324 applications this year, with 135 projects from 54 countries signing agreements. Last month, the Foundation reached another milestone—the 600th grant since its founding in 2017.
Key Moments
Polkadot’s flagship event, Decode, took place in Copenhagen, Denmark, in June, accompanied by satellite events worldwide—particularly in Hanoi (Vietnam), Buenos Aires (Argentina), and Shanghai (China). These gatherings attracted 1,500 in-person attendees (with thousands more watching online) and featured over 100 speakers from across the ecosystem. These hybrid events drew over 11,000 online registrants alone for the Copenhagen event.
Shortly before the Copenhagen event, the Polkadot Summit convened 150 key decision-makers and developers from the ecosystem. In my view, it was highly successful, yielding a key outcome: the introduction of a new metadata schema designed to enhance hardware wallets’ ability to operate trustlessly across the Polkadot ecosystem. Given Polkadot’s flexible parachain model and innovative upgradability, describing the meaning of arbitrary transactions at any given time has historically been challenging. Nevertheless, integrating transaction metadata—and human-readable interpretations of those transactions—provides an in-ecosystem solution that can be widely adopted across major wallet platforms. As we continue to decentralize, such initiatives ensure the ecosystem collaboratively builds shared opportunities in standardization, infrastructure, and tooling.
Sub0, Polkadot’s developer conference, was held for the first time as a hybrid event with live streaming and facilities for remote participation. Around 500 people attended in person (with hundreds more joining online) to hear over 50 speakers share critical insights into Polkadot’s technical foundations. Sessions included core developers discussing latest advances, tools, APIs, and processes, as well as industry practitioners sharing their experiences solving real-world problems using the tech stack.
The Web3 Music Summit, co-hosted by Primavera Sound and the Web3 Foundation, created a space to explore Web3 within the context of music. Of particular note was the feasibility of using DAOs (decentralized autonomous organizations) in the music industry—enabling more direct economic interactions between artists and fans, thereby rebalancing and optimizing artists’ economic incentives.
Numerous Polkadot-related conferences were hosted both within and beyond the community, including ParisDOT in Paris, France, and Polkadot Pulse in Bangalore, India. Additionally, Polkadot satellite events occurred at major global industry gatherings such as ETHDenver, SXSW in Austin, Korea Blockchain Week, WebX in Tokyo, Token2049 in Singapore, CoinDesk Consensus, and Messari Mainnet in New York, featuring workshops, booths, and side events that highlighted Polkadot’s unique strengths and vibrant technical community.
Academic Achievements
The Polkadot Blockchain Academy is an innovative initiative aiming to create a blockchain course rigorous enough for teaching at world-class academic institutions. Launched last year with a five-week course at the University of Cambridge, it continued globally this year, including sessions at the University of Buenos Aires early in the year and at UC Berkeley during the summer.
The University of Buenos Aires course attracted 790 applicants competing for 76 spots, delivered in collaboration with 12 universities across Latin America. This course is not for the faint-hearted—it features a rigorous curriculum tested by top industry minds. Admission is far from guaranteed, yet 80% of enrolled students successfully completed it.
In a later session, 344 applicants competed for 72 spots. We introduced a new Founders Track focusing less on deep technical programming and more on broader technological, societal, and industrial impacts. Completion rates remained similar, with one participant excelling exceptionally. Our youngest graduate was just 17 years old, hailing from Eastern Europe, completing the six-week program.
The Substrate Framework Developer Program, Parity’s primary initiative supporting teams building blockchains using the Polkadot SDK, received 124 project applications in 2023. From 55 reviewed projects, 23 reached their first major milestone. Meanwhile, the team launched a sister initiative, Developer Heroes, focused on mentoring individual developers across the ecosystem, attracting 420 applicants throughout the year. The program now includes over 200 members and 60 mentors.
Empowering Parachains
This year saw the launch and further deployment of two major centralized stablecoins: Tether (USDT) and Circle (USDC). While not panaceas for the decentralization we strive for, they provide meaningful utility for several parachain projects and users. USDC alone holds $250 million deposited on Polkadot’s Asset Hub, with even more USDT deposits contributing to the ecosystem’s total stablecoin holdings.
Kusama’s Asset Hub now fully integrates direct token swaps. This cross-chain magic is enabled by introducing a system-level decentralized exchange, offering neutral and accessible liquidity pools for DOT/KSM to various tokens. Moreover, the liquidity pool is fully integrated with the fee payment system, allowing all these tokens to be used seamlessly for paying fees on the Asset Hub and exchanged via XCM without third-party intermediaries. This greatly simplifies cross-chain transactions, reducing complexity for users, collators, and developers alike.
User tools within the ecosystem continue to evolve, with major upgrades across well-known products. Parity Signer, an app designed to turn any old Android or iOS device into a fully functional, ultra-secure air-gapped wallet, has been rewritten and released as Polkadot Vault. While I remain involved in product direction, maintenance is transitioning from the Parity team to the Novasama team (with formal announcements forthcoming). Recently, Polkadot Vault added new features designed for tight integration with the team’s new Spectr Wallet. For those unfamiliar, this is a foundation-funded, open-source project aiming to become a non-commercial, neutral desktop wallet for enthusiasts and advanced users. Thanks to seamless integration, concerns about Vault devices have diminished to near zero, and the recovery and upgrade process has become delightful.
Smoldot 1.0 also launched this year—a foundation-backed project existing in a properly decentralized manner. Though experimentally integrated into the respected Polkadot.js app in compatibility mode, it plays a crucial role in purpose-built applications like Novasama’s Spectr wallet for advanced users, and in middleware built specifically for it—Polkadot-API (PAPI)—which is emerging as the first fully functional example.
With the Passage of Time
The Polkadot network continues to advance at an unprecedented pace of seamless upgrades and improvements, thanks to its WebAssembly-based meta-protocol foundation and its indispensable canary network, Kusama.
2023 marked the year when Polkadot’s three major codebases finally merged into a single unified repository. Substrate (the general-purpose blockchain development framework primarily used by Polkadot, but now also adopted by Cardano’s Midnight, Mandala, and Polygon’s Avail), Polkadot Node (the Relay Chain node software based on Substrate), and Cumulus (software for building cross-chain capabilities using Substrate) are now all part of a single Polkadot-SDK (Software Development Kit for building specialized software) codebase. This consolidation greatly simplifies and optimizes the development workflow.
While this merge itself doesn’t directly aid decentralization—since the repositories are still managed by the Parity team on GitHub—further changes this year contributed to decentralization: the portion of the codebase defining production runtimes specific to Polkadot and Kusama is no longer hosted under Parity’s GitHub organization. Instead, it is now managed by the decentralized Polkadot Fellowship (detailed below).
Secondly, components of the Polkadot SDK are now published on crates.io, Rust’s ecosystem package registry, providing greater stability metrics for teams building with Polkadot-SDK and reducing reliance on Parity’s internal development processes. Further stability improvements for the SDK are planned for next year, significantly reducing the effort required for ecosystem teams to update their codebases.
Unusual Business
Frame, Substrate’s framework for building on-chain business logic components (in many ways analogous to smart contracts), underwent multiple improvements set for 2024. While some enhancements are visible, others operate behind the scenes—yet equally important. Among the most significant is the message queue system for transmitting XCM messages across the ecosystem. Now ready for rollout, it enables sending more and more complex messages between chains. Other additions include the new feeless_if API for free transactions, a greatly improved task API enhancing the developer experience for on-chain maintenance functions, and Default Configs, allowing pallets to have default values for their Config trait items. Many other improvements were made, though too numerous to list here.
OpenGov represents a major overhaul of Polkadot’s governance system, marking the arrival of the Polkadot Council and Technical Committee and delivering a leap forward in its decentralization credentials. Indeed, we’ve already seen the community rally together to decisively reject the first malicious referendum targeting Polkadot.
OpenGov introduced the Polkadot Fellowship—an entity whose actions and membership are governed by sophisticated on-chain code, a first of its kind and one of several concrete steps toward making Polkadot a fully functional, autonomous DAO capable of attracting, retaining, and nurturing the talent and expertise it needs. Currently comprising around 60 members, with new ones joining regularly, the Fellowship’s progress is tracked during the new OpenDev monthly public calls, attended by many team members (including myself), led by Jay Chrawnna of Kusamarian and hosted by Tommi Enenkel of Mangata. Furthermore, the Fellowship manages the codebase and releases versions of Polkadot and Kusama’s business logic (runtime), although their governing bodies must still execute any upgrades.
We’ve seen OpenGov’s (sometimes sharp) fiscal processes spark extensive online discussions, showcasing insightful groups racing to make their positions heard and understood. While illuminating for a functional and inclusive democratic process, this isn’t always the most efficient decision-making method nor the ideal way to encourage rational discourse. OpenGov is far from perfect, but this year we’ve seen distributed governance and execution mature beyond basic token-weighted voting into a complex DAO. With the emergence of the Polkadot Fellowship as the first non-token-based element of Polkadot’s decision-making body, others will surely follow.
At this pioneering moment, the Polkadot network initiated what could be called its first decentralized, autonomous sovereign wealth reserve—using OpenGov to instruct the network to periodically purchase USDT with treasury funds to finance salaries for the Polkadot Fellowship.
Referendum #231 is using 469,000 DOT to purchase over two million dollars’ worth of USDT (possibly more by the time you read this) via XCM through HydraDX Omnipool, a highly liquid DEX operating as a parachain. The purchasing mechanism uses the on-chain “scheduler” to make small purchases averaging around $250 every half hour. These USDT tokens are placed into a dedicated sub-treasury, autonomously distributed to Fellowship members as part of the salary program. The salary program itself is outlined in the manifesto and detailed in Fellowship RFC#50.
The entire process was approved in a decentralized manner via OpenGov and is being executed autonomously on-chain through professionally audited logic code, written according to pre-published specifications. Throughout the process, no specific individual or entity holds administrative privileges or roles. While this operation places stablecoin purchases into the Fellowship treasury, there is nothing uniquely special about USDT, the Fellowship, or its sub-treasury—this same process could apply to any token with a decentralized exchange within Polkadot’s XCM ecosystem, and to any fiscal matter under any collective. Perhaps we’ll soon see a wealth management collective form to create a decentralized sovereign wealth fund for Polkadot? Regardless, I expect to see a series of rule-based collectives in the future managing their own multi-asset treasuries, possibly with salary programs tailored to specific network needs.
Core Highlights
Agile Coretime, an idea I first proposed at Decoded this year, has now launched on Rococo following a rapidly drafted RFC and intense development cycle, with deployment expected on Kusama and Polkadot in Q1 next year. This fundamentally transforms how Polkadot acquires its key resource—parachain Coretime. Unlike unpredictable long-term staking via auctions, Coretime (the resource) is now sold month-by-month at more predictable prices prior to usage.
Under the Agile Coretime model, Coretime blocks are represented by XCM NFTs, tradable, exchangeable, advertised, and sold within the Polkadot ecosystem just like any other NFT. Additionally, these Coretime NFTs can be subdivided in various ways, allowing smaller Coretime chunks to be resold and ultimately used to support a parachain. Emerging markets like Lastic now offer convenient platforms for trading this new asset class.
The direct impact is eliminating the need to lock up DOT tokens for slot auctions (often funded by crowdloans). This greatly reduces the burden on new teams and decreases uncertainty for current ones. It pairs well with the “on-demand parachain” model, enabling Coretime buyers to contribute to a shared pool that ODPs can draw from as needed.
The Road Ahead
The new year will be a busy one for Polkadot. Agile Coretime, On-Demand Parachains, the Ethereum Snowbridge, and the Kusama Bridge are four major infrastructures on the horizon. Elastic Scaling is a fifth technology I expect to see emerge in 2024. I’m also looking forward to the expansion of our DAO, including new teams, multi-asset sub-treasuries, enhanced XCM, and some exciting new primitives under development.
Our innovative forkless block production consensus algorithm, Sassafras, is now taking shape, and we can expect initial testnet deployments in 2024. Parity Labs is also working on numerous new technologies; the recently closed RFC (after several major iterations in prototype phase), known as CoreJam, may give interested parties a glimpse of where things are headed.
And with that, my brief retrospective concludes; I hope you enjoyed it. All that remains is to wish you all a pleasant holiday season and hope for a freer, more peaceful, and happier world.
See you next year.
—Gav
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