Polkassembly - Dota: Build up an Inscription Ecosystem on Polkadot #2097

Hello, this is the first Polkadot Inscription Ecosystem, Dota. Here, we will introduce what Dota is, how it came about, and its future development plans.

Background

Inscriptions first appeared on the BTC network, embedding information or messages within certain Bitcoin transactions. This technical feature stems from the design of the Bitcoin blockchain, allowing users to append a certain amount of text information during Bitcoin transactions. The advantage of this approach is that it allows data to be permanently recorded on the Bitcoin blockchain without compromising its security and stability.

The advent of inscriptions made it possible to issue assets on the BTC network, which quickly spawned an ecosystem on the BTC network encompassing underlying protocols, sidechains or L2 solutions, NFTs, DeFi, Socialfi, Gamefi, etc., with a total value exceeding ten billion USD, becoming the hottest track in the current crypto landscape.

Chapter 1: Inscriptions Re-Defined on Polkadot

1.1 Polkadot's Edge in Inscription: A Technical Perspective

Technically, Polkadot is more suitable for constructing inscriptions. Compared to Bitcoin, Polkadot has a more suitable module for the development of inscriptions: system.remark. system.remark is a function in the Polkadot system module, allowing users to attach an arbitrary string to a transaction. This feature was originally intended for on-chain marking, and inscriptions, being brief messages, are very suitable for construction within it.

Moreover, Polkadot's network performance far exceeds that of the BTC network. Dota has created a historical record of 1316 interactions within a single block without a significant rise in gas fees, making this high-performance network highly compatible with the application-level development of inscriptions. Although inscriptions are a new phenomenon, Polkadot's system construction seems to have anticipated the arrival of this new asset form.

1.2 Polkadot Inscriptions: Catalysts for Ecosystem Traffic

Over the past nearly four years, Polkadot's ecosystem has solidified its technical foundation, and the focus of ecosystem development has shifted from technological expansion to traffic and application, with inscriptions being an application that can provide traffic for the Polkadot ecosystem.

During the three days of Dota's minting, a total of 26,500 addresses participated, 21,363 of which were new Polkadot users, demonstrating the traffic aggregation capability of this new asset form. Inscriptions built on Polkadot's relay chain will create a conduit for users to transition from the main chain and diverge towards various parachains and applications, becoming one of the vital gateways to the ecosystem.

If the Polkadot relay chain is the ecosystem's aorta and the various parachains are the blood vessels throughout the body, then Dota is the red blood cell, delivering fresh traffic to every corner of the ecosystem.

1.3 The Impact of Inscription: Polkadot's Economic Boost

In recent years, the Polkadot Treasury has predominantly relied on $DOT produced through inflation, with minimal revenue coming from applications or parachains. Inscriptions, however, have the potential to change this status quo.

In the three days of the Dota mint, a total of 328,254 $DOT were consumed, with 262,603 $DOT entering the Polkadot Treasury and the remainder rewarding nodes for maintaining the secure operation of the Polkadot network. In the five days following the start of Dota's mint, the price of $DOT rose from 6.9 USDT to 9 USDT. And this is just the first foray into inscriptions on Polkadot.

It is foreseeable that the development of inscriptions on the Polkadot relay chain will generate more revenue for the Polkadot Treasury and nodes, enrich the usage scenarios for $DOT, and have a very positive impact on the economic prosperity of the Polkadot ecosystem.

1.4 Accelerating Polkadot 2.0's Transition

From a timing perspective, inscriptions will greatly aid the Polkadot 2.0 upgrade. Polkadot's long-anticipated 2.0 upgrade will mark the shift from a "chain-centric" to an "application-centric" model. This transformation requires two main pillars: outstanding developers and substantial traffic. In the past four years, Polkadot has already attracted a wealth of exceptional developers; what the ecosystem now needs most is a structural traffic gateway.

Over the past several months, inscriptions have brought a "stress test" of traffic to various blockchains, with Polkadot being no exception. In addition to the influx of new users mentioned earlier, the three-day period of Dota minting broke all previous records for daily gas usage and daily interactions on Polkadot's relay chain, representing a significant new source of momentum.

Consequently, from the moment inscriptions started catalyzing the BTC ecosystem, an explosion of multi-chain inscriptions was inevitable. Polkadot's system had already carved out space for this new asset class, and its high-performance, low-gas network environment is particularly well-suited for the large-scale development of inscription-based applications. Coinciding with Polkadot 2.0's shift from chain to application focus, the emergence of inscriptions within the Polkadot ecosystem is timely. This allows Polkadot's relay chain to evolve from providing foundational security to its parachains to now driving both technical and traffic growth, thereby boosting Treasury and node revenues, enriching the $DOT economy, and lending even greater impetus to this significant upgrade.

1.5 Polkadot's 2.0 and Inscription 2.0

Beyond the already demonstrated features, inscriptions have even greater potential for development, especially when integrated with the Polkadot ecosystem, where they can create unimaginable synergies.

1.5.1 From Information Layer to System Layer

While system.remark_with_event serves as the entry point at the application layer, the advent of coretime provides inscriptions the possibility to penetrate the system layer. With this, inscriptions can interact more deeply with the blockchain, altering the current method of memo parsing, allowing on-chain execution of partial logic, and thus maximizing the unique advantages of on-chain and off-chain inscriptions.

On Polkadot, the relay chain can act as a construction site for basic functionality and public infrastructure of inscriptions, enabling any parachain, application, or even other blockchains to deploy, mint, and trade inscriptions, or complete basic functions like staking, voting, and burning. More complex functionalities could be realized through the creation of a dedicated "Smart Inscription Parachain."

On this Smart Inscription Parachain, not only can all inscriptions within the Polkadot ecosystem perform complex DeFi operations, but inscriptions from all other ecosystems can also cross-chain to enjoy native inscription applications. Compared to the current hot trend of BTC's L2 solutions, this Smart Inscription Parachain established on Polkadot could meet the application needs of all inscription assets, including BTC. We may well refer to it as the Layer 0 of inscriptions.

1.5.2 Different Parachains, One Language

As engravings on tokens, inscriptions in the system layer are not limited by the chain or token type. Inscriptions are like the English language, allowing people from different countries and chains to communicate, exchange information, and forge cooperation more conveniently.

When Polkadot 2.0 encounters inscriptions, the relay chain and parachains can engage in simpler exchanges of information and assets through inscriptions. For example, all new projects can issue new inscriptions on the relay chain to communicate with the Polkadot ecosystem, achieving a cold start for the project. Existing projects can also issue part of their system's capabilities as inscriptions, interacting with the relay chain and other parachains to attract new traffic.

More interestingly, you can even create a "Grand Polkadot" project spanning multiple parachains, like a gamefi. You could set character inscriptions on the relay chain, deploy weapon inscriptions on Acala, stake ore inscriptions on Bifrost to yield returns, and run complex game scenarios on Moonbeam. With well-defined inscription standards and indexing, you can interact using the same language anywhere.

That's the power of inscriptions.

1.5.3 Embracing Web3 Applications

Compared to tokens, which carry very limited information and require external smart contracts for more rules and logic, inscriptions engrave some standard "definitions," "identification information," and even "basic behavioral norms" onto the token itself. Once indexed and parsed, these inscriptions can be recognized and then used in more complex applications.

Taking gamefi as an example, constrained by the singularity of token information, past blockchain games could only innovate within their economic models, resulting in games that were often boring. Inscriptions, merging assets with information, can be used to construct game components through different standard definitions. You could define a weapon inscription with durability, attack power, and appearance, which, once indexed and parsed, can be used in-game as equipment with additional information for use and trade.

Therefore, inscriptions offer a more convenient way for complex web2 applications to go on-chain. They allow complex product logic to be executed off-chain, while constructing valuable assets on-chain, rather than confining all the web3 space to economic models solely carried by tokens.

Chapter 2: What is Dota?

To be precise, Dota is an inscription ecosystem on the Polkadot blockchain, which currently includes:

Inscription Protocol Standard: dot20
The first inscription under dot20: $DOTA
Inscription Infrastructure: the Dota platform

2.1 DOT20 the Polkadot Inscription Protocol Standard

Dot20 is the inaugural foundational inscription standard of the Polkadot inscription ecosystem, Dota. It defines the standard for fungible inscriptions, including features for deploying inscriptions, minting, transferring, authorizing, authorized transfers, destruction, and proxy destruction.

Building upon this, the Dota ecosystem will also introduce the inscription NFT standard dot721, along with other types of inscription standards. As an open and collaborative ecosystem, more developers have joined the Dota community. We welcome even more builders to contribute and create innovative inscription protocol standards.

2.2 the First Inscription Based on dot20 Protocol: $DOTA

Mint Quantity: 209,892,126,395

Mint Duration: December 20 to December 23, 2023

Holders upon Mint Completion: 26,500

Total Interactions During Mint: 16,412,749

$DOT Consumed: 328,254

$DOT Contributed to Treasury: 262,603

Mint Mechanism: Within 42,000 blocks, 5 million $DOTA are evenly distributed per block based on the number of unique accounts. If there is no interaction within a block, the $DOTA for that block are destroyed.

Under this rule, early users take on the risk of uncertainty but can obtain more $DOTA per interaction. Later users, seeing high engagement and higher certainty, receive less $DOTA per interaction. This creates a fair distribution mechanism with inherent game-theoretical dynamics.

2.3 the Inscription Platform Dota

Dota is in the process of building infrastructure to support the development of the Polkadot inscription ecosystem. This includes, but is not limited to, the deployment of inscriptions on the Polkadot main chain, indexing, ledger management, transfers, trading, launchpads, and cross-chain bridges for inscriptions.

The Dota platform is constructed on the Polkadot relay chain, with all interactions supported by the performance of the Polkadot main chain and utilizing $DOT for gas. This infrastructure will enrich the application scenarios for both the Polkadot main chain and $DOT.

Chapter 3 Development Plans for Dota

As a community project, the development of Dota should be defined and driven by the community. However, Dota is currently in its very early stages, and the foundational layer is not yet complete, which means it is not fully ready for open construction and governance. The current core team of Dota will undertake the work of foundational construction, preparing the basis for decentralized and open development for the inscription ecosystem on the Polkadot relay chain.

The primary tasks for the current core builders are to perfect the dot20 protocol standard and develop foundational infrastructure, including indexing, ledger, deployment, marketplace, and launchpad.

Indexing and ledger will act as public infrastructure to support the growth of the Dota ecosystem, allowing anyone to use them for inscription deployment and application development.

The marketplace and launchpad, as foundational products, will adopt a project-based construction and operational approach, sustained by a sound economic model for their long-term healthy functioning.

The dot20 protocol standard has been preliminarily designed and is open for discussion. We welcome everyone to contribute their valuable insights: https://docs.dota.fyi/dot20-the-fungible-inscription-standard-draft

Dota Marketplace Product Solution

The fundamental issue of $DOT trading $DOTA causing double-spending is that they are not assets of the same standard or confirmation path. $DOT is confirmed on-chain, while $DOTA’s confirmation requires both on-chain and off-chain indexing. The fundamental solution is to inscribe $DOT, creating $iDOT: inscribed DOT. This way, $iDOT and $DOTA can execute unified standards and paths, forming atomic-level, bidirectional trading.

Benefit of This Product Solution

Fundamentally avoids double-spending and decentralizes the trading process.

Atomic-level bidirectional trading, allowing for trading between any inscriptions.

Introduces stablecoin trading pairs, like inscribing USDT.

Integrates $DOT staking earnings from Polkadot, allowing iDOT to accrue interest.

This solution not only avoids double-spending but also lays the foundation for pure inscription DeFi by introducing stablecoins and staking earnings schemes. The challenge is that there’s no solution to fork, and it needs to be built from scratch.

Chapter 4 Milestones and Treasury Requirements

To ensure a stable, efficient, and sustainable development of Dota, we seek support from the Polkadot Treasury to form a stable team for the complex and extensive development of infrastructure and ecosystem operation plans, specifically including:

Milestone 1: Inscription Standard Establishment and Public Facility Construction on Polkadot Relay Chain

Construction Content: Establishment of dot20 standard, dot721 standard, public indexing, ledger, and deployment functions for Polkadot inscriptions.
Estimated Time: 30 days
Required Funding: 50,000 USDT

Milestone 2: Basic Application Construction for Dota Inscriptions

Construction Content: Financial-grade Marketplace construction, operation, and maintenance; Launchpad construction, operation, and maintenance.
Estimated Time: Initial construction period of 90 days
Required Funding: 50,000 USDT for initial construction, 15,000 USDT/month for operation and maintenance, 10,000 USDT/month for marketing.

Marketing will mainly target users outside the ecosystem, continuously attracting them to the Polkadot ecosystem through new inscriptions issued on Polkadot applications.

Milestone 3: Foundational Construction for Dota Ecosystem Governance

Construction Content: Dota Inscription Ecosystem Development Fund, Inscription Builders organization Dota Labs.
Required Development: Website construction, voting system, governance system, staking system, etc.
Estimated Time: Long-term
Required Funding: 50,000 USDT for initial construction, 100,000 USDT for the initial fund setup, 15,000 USDT/month for operation and maintenance, 10,000 USDT/month for educational marketing.

Educational marketing will mainly target the developer community to jointly develop diverse inscription protocol standards and gather developers to build the inscription ecosystem.

For the treasury, we will adopt a multisig approach with 9 people to manage it. These 9 individuals include core builders, community contributors, and public figures, to ensure the funds are used effectively as needed.

The detailed information about the multisig committee can be found on the DOTA - Inscription Community forum on Polkadot at https://forum.dota.fyi

In summary, we aim to complete the above development and operational plans within the first construction period of a quarter, requesting a total of 400,000 USDT, equivalent to 64,516 $DOT at the current price of 6.2 USDT. As a foundational ecosystem on the Polkadot relay chain, the development of Dota will continue to bring more benefits to the Polkadot Treasury, creating a positive economic cycle.

Dota will build a strong marketing and educational system. On one hand, it will continually attract traffic from outside the ecosystem through the new asset form of inscriptions. On the other hand, it will educate more developers about inscriptions, thereby promoting the development of the inscription ecosystem on Polkadot.

Dota is honored to have successfully initiated the first step of the inscription ecosystem on Polkadot and hopes that the support from the Treasury will help maintain its continuous and efficient construction. Our goal is to develop into the strongest ecosystem in the high-performance blockchain inscription sector, continually bringing activity and innovation to the Polkadot main chain and ushering in a new wave of development for the Polkadot ecosystem.

Contact Us

Website: https://dota.fyi

Twitter: https://twitter.com/dot20_dota

Contact Email: [email protected]