Cardano vs. Polkadot

In this article I set out to investigate Cardano and Polkadot, the two most promising blockchain usability platform proposals for DeFi and Dapps.

I will analyse the differences between the two based on the issues that have the greatest impact on the development and operation of the networks.

Quantitative data is from February 2021.

Delegation
Polkadot
It has nominators and validators.

When nominating, tokens are locked for 28 days.

The nominator can lose DOT as punishment if a validator is sanctioned for misbehaviour.

There is a minimum amount of DOT required to earn rewards. This amount is dynamic.

It can be delegated to up to 16 validators and once pools are chosen to produce blocks, the protocol will choose one of those 16 validators to support with your nomination.

A pool is “oversubscribed” when it has more than 128 nominators. This means that only the top 128 nominators, as measured by the amount of nominations assigned to that validator, will receive rewards. All other nominators do not receive rewards.

In order to manage a validator pool, a minimum amount of DOTs is required. This amount is dynamic and depends on certain factors.

Annual yield: ~ 14%.

Cardano
Cardano has delegators and pools.

Tokens are not locked. You can move them whenever you want.

There are no penalties, Cardano works with incentives instead. You can never lose ADA, you just might not collect rewards if a pool doesn’t sign blocks in an epoch (every 5 days) or collect less rewards if it gets saturated with delegation.

There is no minimum amount required to earn rewards. You only need a deposit of 2 ADA to register your wallet (returnable upon delegation cancellation) and 0.17 ADA for the one-time network transaction fee.

Pools can become saturated. Any delegation that exceeds 100% saturation decreases the rewards per delegator, which incentivises some delegators to seek out unsaturated pools, thus promoting decentralisation of the pool network.