The Polkadot community is eagerly looking forward to the launch of the first batch of 5 parachains on December 18. We have carefully studied the parachain model and the value that this game-changing multi-chain technology brings to Web3.
What is Parachain
Polkadot’s heterogeneous multi-chain model was first proposed in 2016. It allows independent blockchains in various scenarios to work together under a unified security “Umbrella”.
Parachain is the next-generation Layer1 blockchain. It is the backbone of the Polkadot network and a free alliance to create a sovereign chain. Polkadot is the Layer0 protocol, which is the foundation and support of the Layer1 parachain network.
Polkadot’s cross-chain interoperability allows any type of data or assets to be sent between parachains, creating a new paradigm for cross-chain services, communities, and economies. This multi-chain architecture allows Polkadot to form the basis of a new, decentralized Internet, which is called “Web3” by Dr. Gavin Wood, the founder of Polkadot.
Compared with purely relying on Layer 2 extension solutions, the parachain model brings scalability to blockchain technology in a more decentralized and trustless way. Transactions are distributed throughout the network and occur “in parallel” or simultaneously on multiple blockchains protected by a set of decentralized validators.
Currently, more than 130 blockchain development teams around the world are building and releasing their parachains in Polkadot, largely because the parachain model provides them with advantages over other alternative technologies. Take Polkadot’s “Canary Network” Kusama as an example. There are already several parachains up and running, and millions of transactions have been processed since the summer of 2021.
The main benefits of parachain
Polkadot’s parachain model opens up a whole new field of possibilities for the future of blockchain technology and Web3. It is difficult to summarize the true value of the parachain model, partly because the benefits of this technology are too many.
Here are some of the main benefits:
Customized for each scene
The creation of the parachain model is based on the idea that the future of Web3 will involve many different types of blockchains working together. This is because there is no single blockchain that can be applied to all scenarios. Each chain has trade-offs, making it very suitable for some applications and less suitable for others.
Just as the current version of the Internet caters to different needs, the blockchain needs to be able to provide multiple services: one chain may be used for games, another for identity management, and another for finance, etc. Connecting these different chains together, Polkadot lays the foundation for the blockchain Internet.
Parachain can be used for the customization of almost every blockchain scenario, and it also represents a tool for experimenting with new scenarios, especially on Kusama. Due to this specialization, parachains can complete more work than any chain alone, creating a rich ecosystem, and their decentralized economy can flourish.
Polkadot provides parachain developers with maximum flexibility when building their chains. The only technical requirement to become a parachain is that it must be able to prove to the Polkadot validators that each block of the parachain follows the agreed protocol. In addition, there is no limit to designing a perfect chain for any specific scene or a certain type of scene.
Compared with building on a smart contract platform, building a parachain also provides greater flexibility for blockchain developers. When building the smart contract layer, developers are limited to the design decisions of the underlying blockchain, which may not be optimal for their use cases. Polkadot allows developers to deeply understand the logic of the Layer1 parachain itself, thereby unlocking more optimization possibilities.
The flexibility of the parachain model realizes the widest possible arrangement of blockchain technology, promotes the innovation of Web3 and overcomes the limitations and pitfalls of previous blockchain networks.
A key point of the parachain model is the ability of differently designed blockchains to communicate with each other. Polkadot’s interoperability, also known as cross-chain composability, means that blockchains are no longer isolated islands closed to each other. Parachain ended the era of isolated blockchains and created a decentralized, interconnected blockchain Internet. Before that, there were only isolated networks with their own tribal communities.
Crucially, Polkadot allows parachains not only to send tokens, but also to send any type of data between each other, thus opening up many new blockchain use cases. Polkadot developers can build services that utilize the characteristics of multiple blockchains, rather than being limited to the characteristics of any one chain.
When you consider the impact of free trade on the economy and isolationism, you will feel the real impact of interoperability. Each independent blockchain is similar to its own independent country, with its own internal community and economy. In view of this, the parachain model represents a strong global free trade system, ending the isolationism that hinders economic development and limits the impact of each independent chain.
Through the parachain model, Polkadot achieves the scalability of Layer1, which is more decentralized and efficient than purely relying on Layer2. However, Parachain can also be combined with Layer 2 solutions to further improve scalability. Polkadot allows transactions to be unfolded and processed in parallel on a dedicated Layer1 blockchain ecosystem, significantly improving the throughput and scalability of non-sharded networks.
In addition, some optimization solutions have been proposed to enable Polkadot to continue to improve scalability and transaction throughput in the future, while maintaining decentralization, security, and data availability. The last point is important because other networks may give priority to TPS (transactions per second) at the expense of these important factors, but sacrificing decentralization for throughput is contrary to the basic purpose of Web3.
Free platform fees
Parachains connected to Polkadot can access as much computing power as needed without additional fees or “gas” costs. Polkadot’s flexibility allows parachain teams and dapp developers to freely provide users with any fee structure they want.
Most importantly, users of parachains do not need to hold DOT tokens to interact with applications and services, or even know that they are interacting with the blockchain. In this sense, the parachain model allows blockchain technology to overcome major obstacles to the availability and adoption of traditional blockchain networks. In fact, freeing users from platform fees will be the main driver of mass adoption.
New blockchains usually need to maintain their security by building a network of validators or miners. This is an extremely difficult and time-consuming process, and many blockchains have a certain degree of security, making them not vulnerable to attacks.
Parachain will automatically gain strong security when connected to Polkadot. This built-in security feature, also known as shared security, allows new blockchain teams to obtain bank-like security with the least amount of work, while also providing them with lower barriers to entry and significantly reducing the cost of starting new networks. The time required.
We live in a world of constant innovation, where technology is updated every day and becomes obsolete the next day. Like all software, the blockchain needs to be updated regularly to add new features, fix bugs, and integrate more advanced technologies when available. But upgrading traditional blockchains is a laborious process, usually involving “forking” or splitting the chain, which slows down the speed of innovation and sometimes splits the community.
Polkadot and its parachains can use simpler “fork-free” upgrades. This means that parachains can be easily upgraded according to the wishes of their communities-so that they can be prepared for the future. With the help of the parachain model, blockchains can better develop and adapt to changing conditions, which means that they can be integrated and upgraded at any time as new technologies emerge.
Independent, customizable governance
Parachains on Polkadot can freely adopt any governance model they deem appropriate, and can access many pre-built modules to implement various on-chain governance systems. The ability to access complex on-chain governance mechanisms allows teams to significantly reduce the possibility of hard forks of their chains, which may split the community in two.
On-chain governance also provides a means of responsible transparency for the parachain community, which is a prerequisite for many institutions and trustees to see a clear decision-making process before participating in blockchain technology. Combined with Polkadot’s no-fork upgrade function, the powerful governance system enables parachain to maintain its leading edge, while promoting community cohesion and ensuring that all stakeholders have a say in the future of the network.
Parachains can also use the treasury on the chain to obtain financial institutions and independently provide funds for activities according to the wishes of the community. Combined with on-chain governance, the Treasury makes it easy for parachains to adopt the form of DAO (Decentralized Autonomous Organization).
This opens the door to new decentralized financing models, from funding to network projects, to decentralized philanthropy, decentralized sovereign wealth funds, and even cross-chain mergers and acquisitions. Therefore, the parachain model allows the blockchain to “make the final decision” at the financial level, which was once only possible for centralized institutions and companies.
Easy to develop
Ultimately, if the development of parachains is an extremely difficult process, the impact of the above benefits will be limited. But the parachain development team benefits from a wealth of development tools, which make it easier than ever to develop a blockchain.
Substrate is a blockchain development framework built by Parity and the main Polkadot parachain SDK, helping the team to significantly reduce the time and complexity of developing parachains. Using Substrate, developers can use ready-made modules of common blockchain components. These modules can be mixed and matched like blockchain building blocks to create a custom parachain that best suits their usage scenarios.
Using parachains, which used to require several years of hard work by expert developers and large development teams, can now be completed within a few months with the resources of early-stage startups.
Multiple forms of parachain
Since Polkadot has given the parachain team the greatest degree of freedom to design its network in a way that best meets their vision, parachain can and does take many different forms, including:
- Independent token economy: Parachain with its own native token, fee structure and economic system.
- Parachain hub: Parachains that provide a series of functions to serve a wider community or usage scenarios, such as DeFi hubs or DAO hubs.
- Smart contract platform: A platform for building and hosting decentralized applications and services based on smart contracts, supporting Wasm-VM, EVM and other types of virtual machines.
- Public interest parachain : Designed for the benefit of the entire Polkadot ecology, the public interest parachain is governed and approved and operated on a non-profit basis, usually using Polkadot’s original token DOT.
- Bridge: The bridge allows Polkadot parachains and dApps to connect to external networks such as Kusama, Bitcoin network and Ethereum.
- Parallel thread: a pay-as-you-go parachain, used in early networks and scenarios that do not need to be continuously connected to the Polkadot network. Parallel thread is a proposed feature, after development is complete, it needs to be added through Polkadot governance.
Parachain Slot Auction and Crowdloan
Parachain leases a slot on the relay chain through Auction to connect to Polkadot, which involves locking the DOT during the lease. DOT holders can help their favorite parachain to win Auction, which may be rewarded. The method is to participate in Crowdloan and temporarily lock their own DOT for the parachain.
Auction and Crowdloan have raised the threshold of blockchain projects, incentivizing them to demonstrate their technology and obtain community support before going online. This reduces the possibility of so-called “air” projects raising funds without the will to do things or the technical ability to fulfill their promises. Crowdloan also represents a fairer and more community-driven way to cold start native tokens in a decentralized manner.
The cost of running a parachain
Parachains connected to Polkadot by renting parachain slots can use as much computing power as needed without additional fees or “gas” costs. Since all the DOTs that the team binds to parachain slots will be unlocked at the end of the lease period, it is best to describe the cost of running a parachain as “the opportunity cost of not being able to use the locked DOT during the lease period.”
Teams who choose to obtain slot funds through Crowdloan can choose to reward their contributors in any way they see fit, which means additional costs. Other small costs include the cost of transporting the Collator node on the parachain.
For applications with a large number of users and traffic, running as a parachain on Polkadot is expected to be more economical than running as a separate blockchain or building on an existing smart contract platform.
The next generation of blockchain
The parachain model brings blockchain technology to the next generation of innovation and adoption, greatly expanding the capabilities and influence of the technology. In the final analysis, for Web3 to succeed, we need a thriving ecosystem, platform, and applications, and all of this must be based on collaboration, free trade, and open exchange, rather than isolation and zero-sum tribalism. By creating a rich ecosystem, allowing professional blockchains to work collaboratively based on their own advantages and field expertise, the parachain model creates perfect conditions for the booming new Web3 economy-decentralized and unstoppable.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/advantages-of-parachain-explore-polkadots-next-generation-blockchain-model/
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