Polkadot 2022 Year in Review and 2023 Outlook

As the crypto industry enters a winter, the Polkadot community is busy building and launching the world's largest and most diverse Layer 1 blockchain ecosystem, while also rolling out several core technologies to prepare for 2023.

Looking back at 2022, the Polkadot ecosystem experienced many significant events. Let's review the most important development trends and milestones of Polkadot over the past year.

The Birth of the Web3 Leading Ecosystem

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 and benefits from secure, trustless cross-chain interoperability.

A total of 74 parachains have won auctions on Polkadot or Kusama, supporting over 300 applications. Approximately 550 projects have been launched or are being developed for Polkadot, which is quite an impressive achievement in the first year of parachains going live.

Over 200 teams have launched or built dedicated blockchains on the Polkadot technology stack. They recognize that this model is more suitable for their needs than smart contract solutions, as Polkadot can offer shorter time to market, lower building costs, and the scalability and interoperability required for ongoing innovation.

The Polkadot community contributed over 130 million DOT and nearly 300,000 KSM through crowdloans to support parachain auctions, demonstrating great confidence in the future of the Polkadot ecosystem.

Such a diverse ecosystem proves that Web3 is not limited to DeFi and NFT use cases. Polkadot's parachains and applications encompass all possibilities of blockchain technology, from social media to supply chains, identity, gaming, real-world asset tokenization, carbon credits, privacy, robotics, the Internet of Things, and more.

This year, there have been some groundbreaking application cases in the ecosystem, including the smart contract parachain Astar collaborating with Japan's largest mobile operator to invest $4 billion to promote Web3 adoption, as well as the NFT parachain Efinity developing Polkadot-enabled NFTs with gaming giant for the Final Fantasy series.

Centrifuge is a parachain that leads real-world assets into on-chain DeFi. After securing investment, it has led the largest investment to date in bringing real-world assets on-chain with $220 million in funding.

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

In 2022, it was also announced that the decentralized social network protocol DSNP would be first deployed on Polkadot, ushering in a new era of social media where users can control their own data, identity, and connections. The music industry also saw some significant innovations on Polkadot, creating a music NFT marketplace that generated $2 million in revenue within days of its launch.

Polkadot's decentralized identity parachain KILT has also gained some very influential applications through collaborations with the German energy sector and medical data platforms.

The DeFi community of Polkadot has also been greatly boosted this year by the integration of Tether, the announcement of USDC's imminent addition, and the launch of decentralized exchanges.

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

Leading the True Path to Decentralization

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

The events of the past year have demonstrated the importance of these design considerations. Centralized systems that require users to trust blindly put user funds, data, and identities at risk, while also facing the risks of censorship and malicious external influences.

Polkadot has been gradually increasing its level of decentralization and eliminating centralized areas that could become bottlenecks, becoming one of the largest truly decentralized autonomous organizations in existence.

2022 witnessed the launch of Polkadot's next-generation governance system OpenGov for the first time on Kusama. OpenGov is the most advanced and complex blockchain governance system to date, eliminating the role of the council and decentralizing the entire governance process of the network into a community-driven referendum 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 component of OpenGov. The Fellowship is a decentralized, on-chain, ranked group of technical experts that replaces the technical committee, providing a knowledge base for the Polkadot community. Since the Fellowship does not have "control" over network decisions, it aims to help optimize the decision-making process of the network without having any direct influence on the outcomes of these decisions.

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 verify data and interact with Polkadot or any Substrate-based chain functionalities.

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

Unstoppable Innovation

In 2022, Polkadot completed 15 seamless, non-fork upgrades, showcasing an unparalleled pace of innovation in the blockchain space, totaling nearly 50 to date. In comparison, Ethereum completed 3 upgrades through hard forks in 2022. Polkadot's ease of upgradeability places it on par with more traditional software updates, ensuring that technology can continue to evolve at an innovative pace. So far, nearly 1,000 blockchains based on Polkadot technology have completed non-fork upgrades.

The parallel chain underwent a significant upgrade on May 4, when Polkadot governance upgraded the relay chain to v0.9.19, unlocking secure cross-chain data transmission via XCM. The launch of XCM showcased the magic of secure cross-consensus bridges to the world. Coupled with the upcoming XCMv3, which will address the "weakest link" issues faced by the previous generation of bridge technology, a problem that caused losses of $2.5 billion just last year.

The parallel chain team quickly began using XCM, opening over 100 channels and sending more than 10,000 messages within the first month. So far, over 160,000 XCM messages have been sent on Polkadot alone, and more than 200,000 messages have been sent on Kusama, ushering in a new era of secure cross-chain interoperability.

v0.9.19 also signifies the official launch of Statemint. Users can now mint assets, including NFTs, and transfer DOT to and from the relay chain, thereby providing essential functionality for the ecosystem.

This year, the second system parachain of Polkadot, Collectives, was also launched, allowing people to organize and act as a group without the need to trust a third party, which is an important feature of Web3. The first such collective initiated is the Polkadot Alliance, a community initiative aimed at recognizing positive contributions to the ecosystem and establishing a code of ethics around bad behaviors such as scams, malicious activities, and abuse of the Polkadot brand.

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

Polkadot development reached an all-time high in 2022. 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 accepted 32 new teams from 127 applications in 2022. So far, 60% of the Polkadot parachains have become part of the SBP.

To support the Polkadot developer community, the funding program has surpassed the milestone of 400 projects 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 beneficial to network development. So far, over 4 million DOT have been paid to teams and individuals supporting the ecosystem, up from about 200,000 at the end of 2021.

Recognizing that the ever-evolving ecosystem requires a large number of new engineers to power it, 2022 was also the founding year of the Polkadot Blockchain Academy (PBA). The first session of the academy took place at the University of Cambridge this summer, with 55 students selected from 560 applicants. The program has been a tremendous success, with many promising developers beginning their Web3 journey and being employed to work in the Polkadot ecosystem after graduation.

The second phase of the Polkadot Academy in 2023 is about to kick off, collaborating with 12 universities in the Latin American region at the University of Buenos Aires in January. The applications for the second phase reached nearly 800 in less than a month, reflecting the particularly high interest in Polkadot in the region.

Looking to the Future

With the achievements of 2022 and everything that is about to come in 2023, the future of Polkadot is bright! This year, the founder of Polkadot has set a new vision for technological development, which will be launched in 2023 if approved by governance.

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

Asynchronous support is an optimization for the consensus of parachains, which could allow 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 that will unlock trustless cross-ecosystem bridging with XCM, as well as NFT transfers and remote locking. Once XCMv3 goes live, Polkadot will be able to launch trustless bridges to achieve interoperability with other ecosystems.

The introduction of parallel threads and other scheduling methods will allow blockchains to launch on Polkadot while bypassing the auction process, significantly enhancing the usability and flexibility of next-generation blockchain deployment options on Polkadot.

We will also see the continued maturation of Polkadot's Wasm smart contract ecosystem, representing a more efficient and powerful alternative to Ethereum's smart contract technology.

The outlook for the broader Polkadot ecosystem in 2023 is also very strong, with a large number of projects set to launch custom parachains in a wide range of use cases over the coming months, bringing a new wave of users to Polkadot. Given that parachains on Polkadot have averaged only about 6 months of operation, we will also see these existing projects mature in 2023. In many ways, although parachain and application development were busy in 2022, teams were largely occupied with launching core functionalities, so the Polkadot ecosystem is just getting started - 2023 is sure to be an exciting year for the community!

![Pol