Cardano vs. Polkadot: How Do They Compare?

  • Aaron Shinyung
  • Cardano
  • June 15, 2021

Cardano and Polkadot are both similar networks, in that they essentially build upon the decentralized digital smart contract model first introduced with Ethereum. But what sets them apart?

(Read our descriptions for Cardano and Polkadot before continuing!)

We must first note their similarities. Both of these altcoins are founded by Ethereum co-founders who left the original projects behind, and both are competing for the market share their former project currently occupies. They also both use proof-of-stake consensus models, which Ethereum plans to implement in their long-awaited 2.0 upgrade. Their native cryptocurrencies both also have multi-billion dollar market capitalizations, though ADA (released in 2017) currently has double the market share of DOT (released in 2020).

There are some obvious differences to get out of the way. Cardano has a maximum supply of 45 billion ADA, while Polkadot has no maximum supply and currently has a 10% inflation goal (though this can change in the future by stakeholder referendum). It is also much easier to transfer your stake on Cardano, which allows you to move your stake whenever you feel like it; on Polkadot, by comparison, it takes twenty-eight days to transfer your stake.

The core difference between Cardano and Polkadot is in their architecture. While Cardano operates on one single two-layer blockchain with one layer focused on settlement and the other on computation, Polkadot uses multiple blockchains running in parallel with one relay chain acting as a validator for the side chains.

This is born from different developer priorities; while Cardano’s focus is on resolving confidentiality concerns by detaching ledger values from the rules for changing those values (simultaneously reducing negative impacts to fungibility that result from “dirty history“), Polkadot’s focus is on alleviating scalability issues inherent to Ethereum by allowing work to be split between multiple blockchains. Polkadot also seeks to be the “mother of all blockchains” by allowing a new level of interoperability between different blockchains; Cardano is addressing interoperability by building bridges with other networks like Nervos.

Other blockchains have adopted features from both Cardano and Polkadot. Monero (XMR) detaches ledger values from transactions by obfuscating information, while Ripple (XRP) recently announced their Federated Sidechains system. Also, “Layer 2” solutions for Bitcoin and Ethereum are in the works. Most notably, Twitter and Square CEO Jack Dorsey has thrown his support behind the Lightning Network, which would allow a much higher volume of Bitcoin transactions to take place in the future.

Both Cardano and Polkadot are undoubtedly innovators in the crypto space, backed by brilliant minds and dedicated communities. Whether they have what it takes to surpass Ethereum, however, has yet to be seen.

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