Snapshot
-What is Parachain?
-Why parachain?
-How parachain works?
The world of cryptocurrency and blockchain is ever-expanding. Every day we come across a new upgrade across different blockchain networks. London Hard Fork’s upgrade of Ethereum gained quite an attraction in the past few months and now it’s Polkadot and Kusama conducting auctions for their parachain slots. What is so incredible about this core component of Polkadot that different projects are fighting hard for one Parachain slot? Let’s understand why!
Project-specific customized blockchains have been integrated within the networks of Polkadot and Kusama. These are called Parachains. It is globally coherent as well as validatable by the relay chain validators. As described earlier these are application-specific data structures.
In general, the parachains may take the form of a blockchain but there isn’t a specific need for these data structures to behave as actual blockchains. The name has been derived from the concept of running parallel to Relay chains, therefore the name ‘Parachain’. The parallel nature of these chains provides a parallel transaction process as well as helps in achieving scalability within the Polkadot System. They communicate with other Parachains via XCM and also share the security of the entire network. The shared security is the responsibility of the Relay chain and since Parachains are integrated within the Relay Chain they benefit from the base features of the Relay Chain.
Before deep-diving into the world of Parachain, let us understand what parachain is and dive into a few of the jargon around Polkadot.
The Jargons around Parachain
Collator– The networking maintainer that maintains Parachain is called Collator. The primary role of a collator node is to retain the necessary information about parachain, maintain a full node for the parachain as well as create a new block candidate to pass the relay chain validators.
The incentivization of a collator node is nothing but an implementation detail of the parachain. These do not require to be stacked on the Relay chain. They do not own any DOT tokens unless they are configured to do so via parachain implementation.
PH– PH also stands for Polkadot Host that requires the state transitions to perform on parachains in order to specify as Wasm executable. The proof of new transitions must be recorded against the registered STF (State transition function) which is stored in the relay chain by the validators. This step is done before the state transition done by Parachain is acknowledged by Polkadot.
Proof of Verification (PoV)– The most important constraint for parachain is that it should be verified by the Relay Chain validators. The verification commonly takes the form of a bundled proof of state transition called the PoV (proof of verification) block. This is then submitted to the parachain collator to be checked.
Why Parachain
The design structure of parachain lets the users conduct faster transactions at a very low cost. It also allows the parachain developers to create blockchains without disclosing the user data to the public network.
The functionality of specified use-cases is optimized that in many instances parachains even support their tokens. For the projects to become parachains on Kusama and Polkadot, they must participate in parachain auction.
Some of the projects that are trying to participate in the auctions to secure a slot for themselves are Karura (KAR), a DeFi (decentralized finance) hub, and Moonriver which is an Ethereum-compatible blockchain platform.
How Parachain works
Information as well as tokens, both can be transferred to Kusama and Polkadot. While Ethereum allows developers to create Dapps within its set boundaries, Polkadot and Kusama let them create independent blockchains that are not governed by Smart contracts.
Therefore, every parachain can have its unique parameters such as transaction fees, block times, mining rewards, and mechanism for governance.
The security system in parachain benefits from the network security of Kusama and Polkadot which is maintained by the Relay chain. The parachains do not have to rely on their validator nodes. The collator nodes that maintain these parachains contain the complete history of the parachains and collect the transaction data of parachain in blocks that are in turn added to the relay chain.
What are Parachain Auctions
There are only 100 parachain slots available on the Polkadot and Kusama networks. However, this number is flexible and is subject to change.
Every parachain has its dedicated slot attached to the Relay chain. To enter one of these slots, the Polkadot and Kusama team has created a method called the Parachain auction. This method is devised to distribute the slots available equally.
The participants have a limited time to place bids for the projects they want to get a parachain slot.
Wrapping Up!!
Parachain is a custom project-specific blockchain. The parachains may take the form of a blockchain but there isn’t a specific need for these data structures to behave as actual blockchains. The method devised by Kusama and Polkadot to allot slots to projects is called parachain auction. Parachain indeed has a lot of potentials to be utilized. Several projects are putting a great fight to get a slot of parachain.
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