What is Polkadot Parachain?

A Parachain runs parallel to the Polkadot relay chain, and that is how it has derived the name Parachain (parallel chain). Here, the idea of running parallel to a relay chain is indicative of the parallel nature of a Parachain, which enables it to parallelize transaction processing with the Polkadot system and achieve its scalability. That is one benefit of becoming a Polkadot Parachain. The other prime advantage of a Parachain is that it can interact or communicate with other Parachains of Polkadot. Also, it shares in the security of the entire network.

What is Polkadot Parachain?

Understand Parachain as a layer-1 chain connected to the layer-0 relay chain of Polkadot. The relay chain is at the center, and the Parachains run parallel to the relay chain. The Parachain is maintained by collator nodes. A collator operates as a full node of the Parachain, and they are responsible for retaining all necessary information of the Parachain. They also produce new block candidates and pass the details to the Relay Chain validators for verification and inclusion in the shared state of Polkadot.

Parachains may have their own native tokens and economies. They can also have their own stipulation around implementation like they can specify whether the collator nodes require to stake their DOT on the Relay chain. Also, they can define the incentivization of the collator nodes. Usually, the collator nodes are incentivized through the inflation of a native Parachain token. However, there are other ways of incentivization also.

There is so much buzz around Parachains because, by design, they share the Polkadot’s cross-chain composability and interoperability. Because of this, they can send or receive any type of data or asset with other Parachains. Thereby, Parachains are capable of supporting a host of new use cases and applications. Besides, they also share and benefit from the security, scalability, and governance of Polkadot. Let’s understand in detail the key benefits of Parachains.

What are the benefits of Parachains?

Flexibility

When it comes to the modeling of Parachains, Polkadot has given optimum flexibility. The only mandate criteria levied by Polkadot is that the Parachain must prove to the Polkadot validators that each of its blocks has followed the agreed-upon protocol. It means the Parachain must follow the consensus of the relay chain. Because of this flexibility, a Parachain can be developed as a chain with its own individualistic design. It can be run as public or private networks and can have its own native token, and governance process. It can also be developed as a platform for others to build applications on top of it.

Scalability

Interoperability, the ability to interact with other blockchains, is one of the key factors that define the scalability of any blockchain. While otherwise, blockchains have to rely on layer-2 solutions for interoperability, a Parachain can achieve interoperability at layer1 itself. This way, Parachains have a more decentralized and efficient means to achieve blockchain scalability and throughput because their transactions can be spread out and processed in parallel over an ecosystem of specialized layer-1 blockchains.

Interoperability

One of the biggest advantages of a Parachain is that it inherently acquires Polkadot’s cross-chain composability. Thus, Parachain as a layer-1 blockchain can provide full control and sovereignty to blockchain communities and also allow them to engage in free trade with other Parachains and external networks. Leveraging Polkadot Interoperability, Parachains can exchange not just tokens but also any type of data, including verifiable credentials, off-chain information from oracles, and smart contract calls. Thus, a Parachain doesn’t function in siloes and is opened to new possibilities.

Governance

As mentioned earlier, Parachains are free to adopt any governance model. They can also integrate several pre-built modules for implementing various on-chain governance systems. Access to sophisticated on-chain governance mechanisms reduces the likelihood of hard forks of the Parachain. Besides, on-chain governance also provides the Parachain communities with accountable transparency.

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