The Polkadot network is a heterogeneous multi-chain network that enables interoperability between blockchains. Polkadot consists of a relay chain and many parachains. The relay chain ensures security and Polkadot’s governance, while the Polkadot parachains are responsible for their own applications and data. Polkadot parachain auctions is the process followed by the Polkadot ecosystem to decide which Polkadot parachain will go live on the network next.
There are currently nineteen parachains on the Polkadot network, each with its own unique features and applications. This article provides a brief overview of the first 10 of these parachains. These are the ones came out of the initial Polkadot parachain auctions.
What is Polkadot?
Polkadot is a third-generation blockchain platform that aims to unite an entire network of purpose-built blockchains. Polkadot enables these purpose-built blockchains to operate and communicate with one another at scale. By allowing various blockchains to exchange information in a seamless way, Polkadot aims to unlock a wide range of real-world use-cases.
Such a design allows individual projects and teams to build a blockchain tailored and optimized to their needs. Each team focuses on solving the problem at hand in the best possible way while leveraging the technology built by other teams. This design is based on the realization that there won’t be a one-size-fits-all blockchain as different applications have different requirements when it comes to volume of data, transaction speed, etc.
Polkadot’s structure is composed of two main types of blockchains: The relay chain and the parachains. The relay chain is the main chain of the network that is responsible to provide foundational services to the parachains, such as governance and interoperability mechanisms. The launch of the Polkadot Relay chain in 2021 brought a lot of excitement to institutional investors as it opened up a completely new world.
What is a Polkadot Parachain?
A parachain is a universally validatable application-specific data structure used by the Relay Chain’s validators. They derive their name from the notion of parallel chains that run alongside the Relay Chain. A blockchain is the most popular form of a parachain, but they don’t have to be actual blockchains.
Because they operate in tandem, they are able to parallelize transaction processing and scale the Polkadot system. They collaborate in the network’s security and may communicate using the XCM protocol with other parachains.
What is a Parachain Slot Auction?
Parachains join the Relay Chain by leasing a slot on it for up to 96 weeks at a time, with the option to extend. Parachain slots are auctioned on the blockchain, with winners seizing a DOT bond for the duration of their lease.
Auctions and crowdloans have raised the bar for blockchain ventures, encouraging them to demonstrate their technology and gain community support before going live.
A Brief Overview of the first ten Polkadot Parachains
1 – Acala
Acala Network is a layer 1 blockchain that aims to develop into the main DeFi hub in the Polkadot ecosystem. Several DeFi products and services, such as lending, borrowing, and staking, are made available by the protocol, which contribute to Polkadot’s user experience and gas savings while also increasing the platform’s scalability.
Homa and Honzon are the two primary protocols these various financial apps use. The Honzon protocol is a cross-chain stablecoin system, whereas the Homa protocol is a tokenized staking liquidity mechanism.
Acala has also established its own automated market maker (AMM), decentralized exchange (DEX), and decentralized governance structure, all of which are powered by a native governance and utility asset known as the ACA token.
2 – Moonbeam
Moonbeam is a fully Ethereum-compatible network on Polkadot. This allows many blockchain projects that are currently being developed on Ethereum or other EVM-compatible networks to simply transfer their apps to Moonbeam.
All Moonbeam-based applications will be able to take advantage of the plethora of Polkadot parachain apps thanks to Polkadot’s infrastructure. Moonbeam is an important component of Polkadot’s vision of laying the groundwork for Web 3.0.
3 – Astar Network
On Polkadot, Astar Network is the Smart Contract Hub for WASM and EVM. Since winning its Parachain auction in January 2022, Astar Network has become one of the top Parachain in terms of overall dollar value locked and most Ethereum assets bridged across.
Astar Network wants to be the most popular smart contract platform connecting Polkadot, Cosmos, and other major layer 1 blockchain networks. The Astar Network, which is an open-source public blockchain that runs on multiple virtual machines, provides the ideal technology solutions and financial incentives for Web3 developers to build on top of a secure, scalable, and interoperable blockchain via its Build2Earn and Astar Incubation Program.
Astar Network is a Web3.0 infrastructure that may be scaled and interoperable. Because Astar Network is based on Parity’s Substrate framework, it might serve as a future Polkadot parachain while also functioning as a scalable smart contract platform. Because Polkadot’s relay chain does not support Smart Contracts, Astar Network, like Moonbeam, is attempting to become one of the main Hubs for decentralized applications.
4 – Parallel Finance
Parallel Finance is another parachain that aims to become a DeFi Hub on the Polkadot network and offers similar services to Acala. The protocol currently supports two primary protocols: a lending protocol and a liquid staking protocol. Parallel finance couples these two protocols with an Automated Market Maker (AMM) Decentralized Exchange (AMM), which allows for both dynamic swaps and static swaps.
Parallel Finance offers a variety of additional services, including a wallet, a liquid crowdloan staking system, yield farming, and the steam protocol for managing DAOs.
Parallel Finance wants to make decentralized finance more accessible by lowering the barrier to entry. To reach its goal of getting Decentralized Finance to 1 billion people, the team is presently working on other blockchains as well, such as the Ethereum blockchain.
5 – Clover Finance
Clover Finance was established in 2020 as a Polkadot parachain based on Substrate. The platform’s objective is to provide developers with an easy-to-use blockchain architecture that saves time and money. Clover promotes itself as a cross-chain compatibility layer at the foundation level.
Clover is a blockchain operating system that aims to provide users with an all-in-one solution for managing their networks and wallets. A storage layer, smart contract layer, Defi protocol layer, and eApp (External Application) layer collaborate to achieve the objective of blockchain interoperability.
Clover is a platform that provides the necessary groundwork for DApps to operate across blockchains. DApps have previously been created and used only within the Ethereum network. The Clover platform will make it easier for developers and regular consumers to use DeFi. Developers are working to make crypto and DeFi adoption as widespread as possible in order to open the floodgates to a vast new audience of billions of people who aren’t using the new decentralized economy.
6 – Efinity
Efinity, a next-generation blockchain for digital assets developed on Polkadot, is powered by Enjin. Efinity was formed to address three major issues.
First and foremost, businesses and developers require a platform that can provide them with a contemporary, mainstream, and developer-friendly NFT experience. Since the launch of Ethereum, there have been many efforts to create infrastructure and tokenize around this general-purpose computing blockchain, but the demand for a superior answer grows ever greater.
Second, creators are under pressure to work with onerous costs, inflexible smart contracts, and disparate interoperability. The acceptance of today’s NFTs is still restricted to crypto enthusiasts. Finally, since the blockchains on which non-fungible tokens reside do not provide any incentives to actual users, miners receive the entire share of newly minted coins.
7 – Composable Finance
Composable Finance is developing a cutting-edge technology platform for the DeFi ecosystem that will enable blockchain networks to communicate and exchange data freely. This will allow Composable finance to play an essential part in blockchain interoperability.
Composable Finance is a decentralized finance (DeFi) cross-chain and cross-layer interoperability platform that aims to make more DeFi protocols compatible. The goal of the project is to eliminate the existing lack of cohesion and fragmented liquidity silos that are besieging the DeFi ecosystem.
Composable is crafting “The face of DeFi’s future,” and it has worked toward realizing its goal of providing scalable cross-chain capabilities for DeFi protocols. It intends to do so by employing a collection of cutting-edge, next-generation technologies.
8 – Centrifuge
The Centrifuge blockchain platform is among the first to bring real-world assets (RWA) on-chain. While other projects tokenize particular assets, Centrifuge is taking a more asset-agnostic, wide-ranging approach that allows users to connect limitless varieties of real-world assets into the DeFi space.
Centrifuge’s flagship dApp is Tinlake. Tinlake is a blockchain-based platform that allows asset originators and investors to connect, trade, and invest in assets. It serves to cater to distinct investor risk-reward profiles. Centrifuge is fostering DeFi activity that is connected to the real world rather than intangible assets.
Centrifuge uses NFTs to represent real-world assets such as invoices and mortgages, allowing them to serve as collateral in Tinlake. This procedure of turning real-world assets into NFTs is the traditional finance ticket to access DeFi liquidity. This will have real-world implications, including enabling more people to participate in asset financing and expanding access to asset financing. It will also create a link between the real world and DeFi.
9 – HydraDX
HydraDX is a Substrate-based cross-chain liquidity platform. The HydraDX Omnipool is the first of its kind multi-asset liquidity pool, with the goal of making frictionless liquidity available for all cryptoassets. Various assets are priced against each other in the Omnipool by using HydraDX’s native token HDX as a proxy for determining their relative worth, which is done with the help of smart contracts.
The HydraDX technology, based on the Polkadot platform, breaks with the traditional idea that assets are bought and exchanged in pairs utilizing isolated pools. Furthermore, HydraDX being part of the Polkadot ecosystem aims to become the choice liquidity provider for all Substrate-based assets.
10 – Interlay
Interlay is a decentralized network that aims to connect crypto-currencies like Bitcoin with DeFi platforms like Polkadot and Ethereum. The Interlay network is hosted on the Polkadot parachain and will be linked to Cosmos, Ethereum, and other major DeFi networks.
According to the founder of Interlay, Interlay seeks to set itself apart from other bridges by offering three key features.
First, Interlay is radically open. Anyone can become a custodian of BTC, anytime. Any individual can keep their own BTC in custody. Vaults can implement additional security measures like threshold signatures, trusted execution environments, MPC protocols, etc. However, that is not mandatory. If one Vault is destroyed, it won’t have an impact on the other Vaults in the network. No one can prevent someone from establishing a Vault.
Second, insurance protects Interlay. Every custodian of BTC must put up more collateral than the value of the Bitcoin he or she is keeping in custody. Collateral is kept on the bridge in different digital assets by vaults. If vaults misbehave, their collateral is cut and clients reimbursed. Users simply trust that Bitcoin and the DeFi platform they employ are secure.
Finally, interlay is community-driven. Any user who adds liquidity to the bridge, KSM/DOT crowdloan contributors, early investors, and building supporters will have a say in the network’s success via their governance tokens. They control the system’s collateral assets, economic variables, and future development.