Polkadot 2022 Annual Review and 2023 Outlook

In 2022, while the entire crypto industry was in a downturn, the Polkadot community was busy building and launching the world's largest and most diverse Layer 1 blockchain ecosystem, introducing multiple core technologies to prepare for 2023.

Looking back over the past year, the Polkadot ecosystem has witnessed many remarkable events worth recording. Let's review the most important development trends and milestone events of Polkadot in 2022.

The Rise of Web3 Leading Ecosystems

Since the launch of the parallel chain at the end of 2021, Polkadot has become the largest and most diverse dedicated Layer 1 blockchain and application ecosystem in just over a year. It is the only ecosystem fully protected by a shared set of validators that benefits from security and trustless cross-chain interoperability.

As of now, 74 parachains have won auctions on Polkadot or Kusama, supporting over 300 unstoppable applications. Around 550 projects have been launched or are being developed for Polkadot, which is quite an impressive achievement in the first year of parachain launches.

More than 200 teams have launched or are building dedicated blockchains on the Polkadot technology stack, recognizing that this model is more suitable for their needs than smart contract solutions. Polkadot offers shorter time-to-market, lower building costs, and the scalability and interoperability needed for continuous innovation.

The Polkadot community has contributed over 130 million DOT and nearly 300,000 KSM through crowd loans to support the bidding for parachains, demonstrating great confidence in the future of the Polkadot ecosystem.

Such a diverse ecosystem proves that Web3 is not just limited to DeFi and NFT use cases. While the Polkadot ecosystem teams lead the industry in cutting-edge DeFi and NFT primitives, Polkadot's parachains and dapps encompass the full possibilities of blockchain technology, from social media to supply chains, identity, gaming, tokenization of real-world assets, carbon credits, privacy, robotics, the Internet of Things, and more.

Some breakthrough adoption events in the ecosystem this year include: the smart contract parallel chain Astar partnering with Japan's largest mobile operator NTT Docomo to invest $4 billion to promote Web3 adoption; the NFT parallel chain Efinity collaborating with gaming giant Square Enix to develop Polkadot-powered NFTs for the Final Fantasy series.

Centrifuge is a parachain that leads real-world assets into on-chain DeFi. After obtaining investment from a trading platform, it has led the largest investment to date of $220 million to bring real-world assets on-chain.

The privacy hub parallel chain Manta Network has the largest trusted setup in history using zero-knowledge technology, with over 13,000 participants from 177 countries/regions. This technology is crucial for building a better and more secure network to protect sensitive information privacy, and other developers in the ecosystem can utilize their privacy protection features.

In 2022, it was also announced that Project Liberty's DSNP( decentralized social network protocol) would be first deployed on Polkadot, thus ushering in a new era of social media where users can control their own data, identity, and connections, which is a key requirement of Web3. Under public pressure, the music industry also saw some significant innovations on Polkadot, creating a music NFT market and generating $2 million in revenue within a few days of its launch.

KILT, the decentralized identity parachain of Polkadot, has achieved some very influential adoption through partnerships with Germany's DENA, Energy Web( to create identity registration for the German energy market, and DeBio), an anonymous-first medical and bioinformatics data platform(.

The DeFi community of Polkadot has also been greatly boosted this year due to the integration of Tether )USDt(, the announcement that USDC will also join Polkadot, and the launch of Equilibrium and Polkadex decentralized exchanges.

With its unparalleled tech stack in flexibility, scalability, upgradability, and security, Polkadot is proving to be the perfect home for all-encompassing and rapidly developing Web3 opportunities.

Leading the Way to True Decentralization

In 2022, Polkadot took an important step towards becoming the most decentralized, trustless, and unstoppable Web3 ecosystem.

The events of the past year and some imprudent behaviors have demonstrated the importance of these design considerations, which are the foundation of Web3. As we have seen, centralized systems that require users to blindly trust them put user funds, data, and identities at risk. At the same time, they also face risks of censorship and malicious external influences.

Polkadot has been gradually increasing its degree of decentralization and eliminating centralized areas that may become bottlenecks, becoming one of the largest existing true DAOs ) decentralized autonomous organizations (.

Crucially, 2022 witnessed the first release of Polkadot's next-generation governance system OpenGov, which was initially launched on Kusama. OpenGov is the most advanced and complex blockchain governance system designed to date, eliminating the role of the more centralized Polkadot Council and decentralizing the entire governance process of the network to a community-driven voting system. This ensures that decisions can always be made and executed in an unstoppable, fully autonomous manner.

The Polkadot Fellowship was also launched this year, which is an important part of OpenGov. The Fellowship is a decentralized, on-chain, ranked group of technical experts that replaces the technical committee and provides a knowledge base for the Polkadot community. Since the Fellowship has no "control" over network decisions, it aims to help optimize the decision-making process of the network without having any direct impact on the outcomes of those decisions, which remain under the control of all network stakeholders.

Due to these efforts to achieve true decentralization, after a 3-year collaboration with the U.S. Securities and Exchange Commission, the Web3 Foundation announced in November 2022 that DOT has transitioned from a security to software, marking a milestone achievement in realizing Web3.

Among other initiatives on the path to decentralization, Polkadot is promoting the industry's most advanced light client technology, allowing users to no longer rely on third-party node services to check data and interact with functionalities hosted on Polkadot or any Substrate-based chain.

The Staking system of the Polkadot network also underwent some key upgrades in 2022, including the nomination pool, which increased the opportunity for local staking on Polkadot by reducing the minimum staking amount to 1 DOT, and further achieving decentralization and trustlessness by making it easier for more people to stake directly on Polkadot using their own private keys.

Unstoppable Innovation

Without Polkadot's industry-leading upgradeability features, these upgrades would not have been possible. In 2022, Polkadot completed a total of 15 seamless, non-fork upgrades, with an unparalleled pace of innovation in the blockchain space, totaling nearly 50 to date. In contrast, Ethereum completed 3 upgrades via hard forks in 2022 and 4 in 2021. Considering that Apple performed 16 upgrades on iOS in 2022 in the non-blockchain world, Polkadot's upgradeability puts it on par with more traditional software updates, ensuring that technology can continue to evolve at an innovative pace. To date, there have been nearly 1000 non-fork upgrades of blockchains based on Polkadot technology.

The parallel chain underwent a major upgrade on May 4, when Polkadot governance upgraded the relay chain to v0.9.19, unlocking the secure cross-chain data transfer of XCM. After a period of practical testing on Kusama, the launch of XCM on Polkadot showcased the magic of secure cross-consensus bridges to the world. Coupled with the upcoming XCMv3, this will resolve the "weakest link" issue that has plagued the previous generation of bridge technology, which alone resulted in a loss of $2.5 billion over the past year.

The parallel chain team did not waste time using XCM, opening over 100 channels and sending an impressive 10,000 messages within the first month. So far, more than 160,000 XCM messages have been sent on Polkadot alone, with over 200,000 messages sent on Kusama, ushering in a new era of secure cross-chain interoperability.

v0.9.19 also signifies the official launch of Statemint, which was first deployed to Polkadot in December 2021 but is now fully operational. Users can now mint assets including NFTs and transfer DOT to the relay chain or transfer it out from the relay chain, thereby providing essential functionality for the ecosystem.

This year, the second system parachain of Polkadot, Collectives, was launched, enabling people to organize and act as a group without the need to trust third parties like lawyers and courts, which is an important feature of Web3. The first of such collectives initiated is the Polkadot Alliance, a community initiative aimed at recognizing positive contributions to the ecosystem and establishing ethical guidelines around misconduct such as scams, malicious behavior, abuse of the Polkadot brand, and undisclosed source code.

One of the most active and rapidly evolving developer communities in Web3

If you have spent a lot of time in the rapidly growing developer community on Polkadot, it is not surprising that Polkadot development reached an all-time high this year. Polkadot peaked at nearly 2,500 monthly active developers in 2022, remaining one of the most active developer communities outside of Ethereum throughout the year.

Substrate Builders Program )SBP( guides builders to launch projects and received 32 new teams from 127 applications in 2022. So far, 60% of the Polkadot parachains have become part of the SBP.

In order to support the Polkadot developer community, the Web3 Foundation's funding program exceeded its 400th project milestone this year, distributing 150 new grants in 2022, receiving 267 applications, and ultimately delivering 230 grant projects.

Polkadot's decentralized on-chain treasury has also disbursed a record amount of DOT this year to support projects that benefit the network's development. So far, over 4 million DOT has been paid to teams and individuals supporting the ecosystem, up from about 200,000 at the end of 2021.

Recognizing that the evolving ecosystem requires a large number of new engineers to power it, 2022 is also the founding year of the Polkadot Blockchain Academy )PBA(. A tight academic curriculum aims to provide students with all the knowledge needed to become top blockchain engineers. The first session of the academy was held this summer at the University of Cambridge, selecting 55 students from 560 applicants. The program has achieved great success! Throughout this process, many promising developers began their Web3 journey and were employed to work in the Polkadot ecosystem after graduation.

The second phase of the Polkadot Academy is set to kick off in January 2023, in collaboration with 12 universities in the Latin American region at the University of Buenos Aires ) UBA (. The second phase received nearly 800 applications in less than a month, reflecting a particularly high interest in Polkadot in the region. Follow-up organization has already begun, and we are building a talented developer talent pool to help shape the future of Polkadot.

Looking to the Future

With what has been accomplished in 2022 and everything that is set to come in 2023, the future of Polkadot is bright! This year, Polkadot founders Rob Habermeier and Gavin Wood have outlined a vision for the development of new technologies for Polkadot, which we will launch in 2023 if approved by Polkadot governance.

First and foremost, OpenGov will be launched on Polkadot after undergoing a period of battle testing on Kusama, and it will be submitted to the Polkadot community for voting. OpenGov will not only bring more decentralization to the governance process but also increase the number of collective decisions the network can make at any given time, significantly enhancing the agility and adaptability of Polkadot's upgrade path and ensuring a future of continuous innovation.

Another influential upgrade will be asynchronous support, which is an optimization for parallel chain consensus, potentially allowing Polkadot to process over 1 million transactions per second, representing a new peak in industry throughput.

XCMv3 is an important upgrade to the Polkadot interoperability standard, which will unlock trustless cross-ecosystem bridging with XCM, as well as NFT transfers and remote locking. Once XC