22. Polkadot Parachain – Next-generation blockchain
In the previous lesson, we discussed what is Polkadot and how it works. Today, we will take a closer look at its essential element, which is parachain. It is a unique solution model that brings great value to multichain technology.
Parachain – what are they?
You already know that Polkadot is a multichain solution that connects cooperating, independent blockchain. It was first launched in 2016. Parachains, they are often referred to as next-generation blockchains. They are located in layer 1 and form the entire skeleton of Polkadot.
The Polkadot network is completely interoperable, which allows any type of data to be transferred between strings. Thus, it forms the basis for the new, decentralized Web3 Internet.
Parachains is a model that increases chain scalability blocks in a decentralized manner. They don’t just rely on Layer 2. On the contrary, transactions are distributed across the network, either simultaneously or in parallel. They are secured by one group of decentralized validators as well.
Developers build and launch their own parachain in the ecosystem. On the Web Kusama – brother Polkadot – since 2021, several dozen parachain have been created that successfully operate and process countless transactions. Parachain Polkadot provides new opportunities for blockchain technology.
How do Polkadot parachains work?
Parachain connects to the Polkadot network by leasing a slot on the Relay Chain. Everything is done because of an auction, where bonds of the native network token are blocked – DOT for the duration of the lease.
As a token holder, you can help your favourite parachain win an auction, potentially for a prize. How to do it? You just need to put some amount into the crowd loan and temporarily lock your DOT for the bond in question parachain.
Parachains, connected via a slot, get the computing power they need. Completely free of charge.
Parachain – benefits
- Specialization and use – Parachains are designed in such a way that they can be used in any blockchain. You experiment with them, constantly looking for their new specializations. This allows parachains to do many useful things together. More than a single blockchain. As a result, they create a rich ecosystem for the new, decentralized economy. At this point, you may be asking yourself why? Because the entire parachain model was designed with theWeb3, which will include many blockchains of various types. What’s more – no single blockchain is fully effective, hence the idea for Parachain Polkadot.
- Flexibility – here, parachains have countless advantages. As a developer, you have full flexibility. The only requirement for parachains is that they must be able to prove to network validators that each of their blocks follows an agreed-upon protocol. Besides, design your parachain how you want, when you want and with any use case. When building this chain, we are also not closed to the design decisions of the underlying blockchain. As a result, the optimality of parachains is even greater.
- Scalability – parachains enable Polkadot to achieve scalability already in layer 1. What is more decentralized and optimal than relying on layer 2. At the same time, parachains contain Layer 2 solutions, which further increases their scalability.
- Interoperability – the use of the parachain model means that different blockchains can communicate with each other. Cross-chain, which Polkadot uses, allows for cooperation between blockchains. Parachain form a coherent, decentralized blockchain system. It’s like a connected internet of blockchains. Parachains send each other cryptocurrencies, any data, information and basically anything you want.
- No fees – when describing Polkadot, we mentioned that each of the blockchains working outside the main chain has unlimited computing power. Thanks to this, network costs are practically non-existent. We do not have to worry that we will pay for gas, as is the case with Ethereum. Parachain teams and dApp developers implement their own free user charging structure. What’s more – as a parachain user, you do not need to have a DOT (network’s native cryptocurrency). And so, you can easily connect to applications or services offered.
- Security – parachains receive them automatically when connecting to Polkadot. This is a new security proposal, called shared security. This distinguishes parachains from classic blockchains, which must create their own security system, most often by network validators and/or miners.
- Updates – it is definitely easier than in traditional blockchains. It depends on the network community. As a result, parachains always follow current trends and have cutting-edge features.
- Management model – any. Basically, the one they see fit. Thanks to the on-chain management system, they have access to many modules. So, they choose the one they think is the best. This reduces the risk of the chain forking and splitting the network in two.
- On-chain vaults – parachains can be acquired by financial agencies that will support activities promoted by the network community. On-chain management and on-chain vaults allow the parachain community to easily adopt the form of a DAO.
- Development – with parachain we have a lot of development tools. Using them, building a blockchain is easier than ever.
These are just ten of the most important benefits of using the parachain module, in our opinion. With the development of Polkadot and parachains, they will come.
Types of parachains:
As Polkadot gives its teams full flexibility, parachains can take many forms. We will include:
- Parachains with their tokens, ecosystem, and fee structure.
- The ones that provide a lot of functionality. They serve the wider community (DeFi, governments).
- They can take the form of a platform on which dApps are built and hosted, or services based on smart contracts.
- Serving the common good. They are to benefit the entire Polkadot ecosystem. They usually operate on a non-profit basis and use the DOT token.
- Parachains that connect to external networks, e.g. Kusama.
Parachain and Polkadot is a wholly new, innovative model of blockchain technology. They significantly expand the possibilities and flexibility of this technology. To a large extent, it is thanks to this ecosystem that the decentralized Internet can be fully successful.
Polkadot and parachain is a promising ecosystem, operating on the principles of blockchain cooperation.