Parachain is a relatively new concept in the world of crypto, and this article will explain what it means and how to use it. Parachains are a type of blockchain that comes with the features of both blockchains and linear chains. With this article, you will be able to understand what is Polkdaot and Kusama Parashaent as well as how they work. This guide walks through everything in an easy-to-follow manner
What are Parachains on Polkadot & Kusama?
The primary purpose of the parachain slot auctions is to give slots to projects that want to operate on either Polkadot or Kusama, and run up to 100 parachains simultaneously. Parachains connect to the Relay Chain in order for projects on Polkadot & Kusama to enjoy its network architecture.
Parachains are a new technology on Polkadot & Kusama that allows for faster and more secure transactions. Parachains are not just for payments, but can be used for other purposes such as governance and data storage. There is a wide variety of projects that use parachains, from simple applications to more complex ones. The parachain network is still in its early stages, but there are already some exciting developments planned for the future.
How are Parachains connected?
Parachains must connect to the Relay Chain in order for projects on Polakdot & Kusama to enjoy its network architecture, however selecting the most worthy projects is a long process.
How will Parachains bring network effect to Polkadot?
It is expected that only 30 projects will be operational during the 2021 phase of the parachain slot auction, however it is hoped that more projects will join in later phases.
How Does Parachains Work?
Parachains are customizable blockchains that offer loads of incentives to the network. Aside from improving interoperability, parachains allow for faster and cheaper transactions. Projects can build their blockchains with unique use cases and their tokens. This will see an influx of projects to the Polkadot blockchain that will allow for increased levels of adoption.
Users who contribute their KSM or DOT assets to an auction and gets airdropped its tokens do not need to transfer control of their KSM or DOT to the auction participant or any other third party, and they retain control over their assets, which might get locked up for a period
Some Parachain Properties you should know
Parachains allow blockchains to achieve scalability at layer-1 rather than relying on layer-2 solutions. Parachains contribute to the scalability and speed of the Polkadot network. When fully operational with 100 parachains, the system is expected to be able to process tens of thousands of transactions per second.
Specialization and Flexibility
Polkadot is a network that connects blockchains, parachains, or parallel chains. Parachains are part of Polkadot’s infrastructure next to the Relay Chain and Bridges to other blockchains. Parachains can be run as public or private networks, as enterprises or communities, as platforms for others to build applications on top of and/or as common goods for the benefit of the entire Polkadot ecosystem.
Parachains are self-sovereign blockchains that rely on Polkadot’s relay chain for security and communication with other relay chains. Parachains are part of Polkadot’s infrastructure next to the Relay Chain and Bridges to other blockchains. Every Network connected to Polkadot as a Parachain will have some specialization, customization, to deliver the best things like scalability, smart contracts, bridges, services, and things that we even can’t imagine now.
Parachains have a limited lifespan of 2 years, broken into four “lease periods” of 6 months. Bidders may bid for selected lease periods. Cosmos, Tezos and EOS) is in the tens of millions of USD per year, with Ethereum and Bitcoin in the billions, while the estimated opportunity cost to lease a parachain is $100 200k for 12 months.
Projects that win the auction for a parachain slot will receive DOT loans back at the end of the lease period. Projects can trust that their contributions are safe and will eventually be received back. Parachains on Polkadot offer lower bond requirements than Kusama.
Parachains allow blockchain communities to have full control and sovereignty over their own layer-1 blockchain while also benefiting from the possibility to engage in free trade with other parachains and external networks. Polkadot’s cross-chain composability allows not only the exchange of tokens, but also any type of data, including smart contracts calls, verifiable credentials, and off-chain information from oracles such as stock market price feeds. This ends the siloed nature of the blockchain space and opens up new possibilities for applications to interoperate and create novel services
Parachains on Polkadot can use a variety of pre-built governance systems. On-chain governance provides accountability and transparency for parachain communities.
What are the Fees & Cost of Running a Parachain?
Polkadot charges transaction fees based on the amount of data transferred, with a lower fee for larger transactions. There is no limit to the number of parachains that can be attached to Polkadot.
Parachains that lease a parachain slot from Polkadot can access as much processing power as they require without incurring additional fees or “gas” expenditures. Due to the fact that the whole amount of DOT/KSM bonded by a team for a parachain slot is unlocked at the conclusion of the lease time, the cost of running a parachain is best defined as the opportunity cost of not having access to the locked DOT/KSM during the leasing period. Teams that opt to fund their spot through crowdlending may choose to compensate their contributions in any way they see suitable, at their own expense. Additional minor expenditures include the cost of running collator nodes on each parachain. Running on Polkadot as a parachain is predicted to be more cost effective than running a standalone blockchain or building on an existing smart contract platform for apps with a large number of users and traffic.
What are Polkadot Parachains?
Parachains are Substrate-based independent blockchains that connect to the Polkadot or Kusama Relay Chains. The purpose of parachain auctions is to allocate parachain slots to projects that want to operate on either network. These parachute slots are intentionally scarce to encourage competition and the best possible allocation of fixed Relay Chain resources. By limiting the number of available slots, aspiring parachains must outbid each other to earn a lease, both for the initial launch and again for renewal once the lease period expires.
What are Kusama Parachains?
Parachains must connect to the Polkadot network in order to enjoy its architecture. Parachain slot auctions are used for selecting worthy projects for connection. The primary purpose of the auction is to give slots to projects that want to operate on either Polkadot or Kusama, and run up to 100 parachains simultaneously.
How many Parachains does Polkadot have?
Polkadot will eventually provide 100 parachain slots. Additional places will be distributed in instalments over the next few months. According to a press release, not all of these slots will be given via parachain slot auctions; some will be utilized for governance-enabled, common-good parachains.
Parachains are integral parts of the Polkadot and Kusama architecture as they are customizable blockchains that offer loads of incentives to the network. Aside from improving interoperability, parachains allow for faster and cheaper transactions. Customizable features mean that projects can build their blockchains with unique use cases and their tokens. This will see an influx of projects to the Polkadot blockchain that will allow for increased levels of adoption.