The world of cryptocurrency has seen a significant growth starting with Bitcoin, leading to the emergence of various blockchain networks like Ethereum, Corda, Cardano, Tron, Hyperledger, Polkadot, and more. Among these, Polkadot stands out as a favorite for many due to its high-interoperability feature.
Polkadot is a blockchain platform and cryptocurrency that offers a core network, the relay chain, and parallel blockchains known as parachains. Parachains play a crucial role in the Polkadot ecosystem by enabling interoperability with the network and other parachains.
What is Polkadot’s Parachain?
Parachains are custom project-specific blockchains integrated within the Polkadot and Kusama networks. They run parallel to the Polkadot relay chain and can customize various use cases feeding into the relay chain, which manages shared security, consensus, and cross-chain interoperability.
Collators & Validators
Collators collect parachain transactions and present state transition proofs to relay chain validators, while validators secure the relay chain by validating collator proofs and participating in consensus.
Parachains benefit from Polkadot’s cross-chain composability, enabling them to send and receive various types of data or assets with other parachains, supporting new use cases and applications.
The Core Benefits of Parachains
Parachains offer high-level interoperability, scalability through parallel processing, flexibility in design, and a robust governance process. They can be applied in various sectors such as IoT, smart contracts, digital wallets, DeFi, identity verification, and more.
How Parachains Work on a Polkadot Network?
To run a project on a parachain, one must lease a slot in the Polkadot relay chain through a parachain slot auction using DOT tokens. Interested parties bid for slots and lock in DOT amounts for a specific lease period, unlocking them at the end of the lease.
How much does it cost to run a parachain?
Running a parachain on the Polkadot network costs nothing in terms of fees, as the locked DOT amount is unlocked at the end of the lease period. However, the DOT remains locked during the lease, representing an opportunity cost.
Parachain In a Nutshell
Parachains, integrated within the Polkadot network, offer cross-chain interoperability, scalability, and governance benefits. They support new use cases, share data and assets with other parachains, and leverage Polkadot’s security features.
