What is a parachain?
Parachains are custom, project-specific blockchains linked to the Polkadot (DOT) and Kusama (KSM) networks. Users can utilize them for various purposes, including connecting to the primary blockchain—the relay chain, regarded as the core of the Polkadot and Kusama networks. Why? Without the relay chain, cross-chain blockchains cannot transfer assets from one blockchain to another.
Each parachain has specific uses and, in many cases, supports its corresponding tokens. Parachains must participate in an auction before they can become either a Polkadot or Kusama parachain. More information on how to participate in parachain auctions is available on the Polkadot website.
What is a Polkadot parachain?
The Polkadot network comprises several heterogeneous blockchain shards that have been dubbed “parachains.” Polkadot parachains are next-generation blockchains that go beyond the legacy networks’ limits. They are a diversified ecosystem of independent platforms, communities and economies that are transforming the way we communicate online.
Parachains on Kusama work quite the same as those on Polkadot since Kusama was built to mimic most of Polkadot’s major features.
Read more about parachains on Polkadot and Kusama here.
The so-called “Polkadot relay chain” connects and secures parachains, allowing them to communicate with external networks via bridges.
Let us go through each part of the Polkadot architecture in greater detail below.
- Polkadot relay chain: The component responsible for shared network security, consensus and cross-chain interoperability. All parachains enjoy the base characteristics of the relay chain through their connection to it.
- Parachains: Independent blockchains with corresponding tokens and optimized functionality for specific use cases. Parachains can connect to the relay chain in one of two ways—paying as you go or renting a slot for continual connectivity.
- Bridges: Sets of specialized blockchains that let Polkadot shards connect to and interact with other networks, such as Ethereum (ETH) and Bitcoin (BTC).
The Polkadot architecture enables parachain users to conduct transactions faster and cheaper. It paves the way for parachain development that allows developers to build blockchains that do not transmit user information to the public network or require many transactions.
Updates made to Polkadot parachains
Polkadot regularly announces new parachain launches, project updates and parachain auctions through a newsletter. Let us look at the most recent developments made to the Polkadot network.
While Polkadot seamlessly connects the parachains in its network, each external chain needs to create custom-built implementations to gain the same level of access.
In cross-chain blockchains, bridges allow assets to be transferred to other blockchains. As such, bridges are becoming increasingly vital in the decentralized finance (DeFi) landscape. Most bridges, however, are custodial.
Custodial bridges are “trusted bridges” that can either be centralized or semi-decentralized, determining their right to manage the exchange of coins and other assets on their network.
In bridges, maintained through a custodial architecture, validators operate multisig wallets to perform bridging operations. While the validator set can be variable or constant, and its keys may or may not be kept in a secure enclave, the basic architecture remains the same.
Note, however, that the recent advent of bridge hacks proved that keeping a honeypot containing hundreds of millions of dollars is a security risk.
This light client bridge is dubbed the “Holy Grail of bridges” since the target blockchain, itself, confirms if a user sent funds to an address on the origin blockchain. The destination blockchain can mint or unlock funds for the user without relying on third parties to verify the information. But light client bridges can be costly because users must verify proofs on-chain, thus increasing gas expenses.
Enter Snowfork, an Ethereum trustless bridge that has been in the works for the past two years. The bridge will allow users to trustlessly move ETH and other tokens from one Polkadot parachain to another or back to the Ethereum network, most likely via the Snowfork hub.
Everything will be Ethereum Virtual Machine (EVM)-based, so they would likely work on other networks as well. However, more advanced versions should have the ability to transmit any data type across chains. Ethereum smart contracts will, therefore, be able to interact with Polkadot.
Note, though, that Snowfork remains under development due to delays in its initial road map. Those who wish to use the bridge can do so via GitHub.
Custodial bridges under development
Complex bridges are still in development, but some projects have built custodial bridges that users can use in the meantime. We’ve listed three bridges below.
ChainBridge is a bridge deployed between EVM- and Substrate-based chains. ChainSafe created the bridge as a white-label solution and employed it to power their Ethereum bridges for projects like Centrifuge and Meter.
Astar Network is also working hard on several bridges to become a parachain bridge hub for other ecosystems. Its first implementation is Cosmos (ATOM), which allows users to connect several chains to work with one another simultaneously. In addition, Astar intends to link as many platforms as possible to its network eventually.
Interlay is a parachain bridging project for Bitcoin. Like Snowfork, Interlay is trustless but relies primarily on providing economic incentives. And because Bitcoin does not use smart contracts, that is about as good as it gets for users.
What is Polkadot built on?
Polkadot’s underlying technology is Substrate, a development framework that makes it easy for users to build a unique blockchain for a particular use case.
Substrate is modular, adaptable and allows users to employ premade components to build core business logic while leaving the framework customizable. It is, therefore, generic, minimizing assumptions about a blockchain’s construction.
Some of Substrate’s core features are:
Substrate is a blockchain-building framework based on Parity Technologies’ experience constructing Ethereum, Bitcoin and enterprise blockchains. It is also used to build Polkadot’s relay chain.
Substrate’s main components are:
A blockchain’s foundation is its shared ledger, which requires maintenance and preservation. Substrate does not make any assumptions regarding the blockchain’s content or structure.
Substrate’s underlying database layer uses simple key-value storage with a modified Patricia Merkle tree built on top. This unique structure allows Polkadot to determine if an item is or is not in the repository quickly. This is essential for light clients relying on storage proofs to offer lightweight yet trustworthy interactions with the blockchain network.
Communication on a decentralized blockchain requires the establishment of a peer-to-peer (P2P) networking protocol.
Libp2p is a modular P2P networking stack users can employ for Substrate. It allows Substrate-based blockchains to share transactions, blocks, peers and other vital system details without accessing centralized servers.
Libp2p is unique because it does not make assumptions about user-specific networking protocols in line with Substrate’s philosophy. As a result, users can implement alternative transports without worrying about potential biases.
Users can determine blockchain states and changes by gathering and organizing transactions into blocks. Note, however, that the order of transaction completion can impact a ledger’s final state.
Substrate gives users complete control over their networks’ transaction dependencies and queue management processes. It assumes each transaction has a weight and a set of prerequisite tags for creating dependency graphs. The simplest dependency graphs are linear, but users can create others that are more complex.
A blockchain network can reach a consensus on updates made to the chain in various ways. Traditionally, consensus engines were inextricably linked to the rest of the blockchain.
On the other hand, Substrate went to great lengths to establish a consensus layer that users could easily alter during development. It was designed so that consensus could still be hot-swapped even if the chain had already gone live.
Multiple consensus engines come built into Substrate, including those owned by proof-of-work (PoW), Aura (Authority Round) and Polkadot. However, keep in mind that Polkadot’s engine is different since it isolates the block production process from the block finalization process.
Data and indexing updates related to Substrate
Indexing projects like The Graph are essential because blockchain nodes cannot obtain old data directly and efficiently. Furthermore, if something is immutable, the only way to get it once and store it in a more accessible format is to create an index.
Projects and data platforms require indexing to work with one another. For example, instead of attempting to query the blockchain and make independent storage systems, data platforms can simply execute efficient queries through indexing projects.
SubQuery (SQT) is an indexing project that works like The Graph. It has a class of indexers elected by SQT token holders. To use the application, users need SQT tokens to pay for queries. The indexer extracts and organizes blockchain data, allowing users to make queries on SubQuery faster than directly querying the blockchain.
Unlike The Graph, SubQuery does not have curators that create feeds; instead, it uses purchase order contracts as data sources.
Subsquid is another ongoing Substrate indexing project. Although it works on the same core principle as its older version, the new Subsquid has added features to its data retrieval layer. Instead of using a single monolithic indexer class, it now employs three distinct actors—indexers, processors and gateways.
The indexers handle blockchain data organization, which comprises most of the work. As such, they usually come in the form of massive servers. The processors, meanwhile, perform data queries so they can be any device smaller than the indexers.