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(The article is very long, it is recommended to save it before reading)With Dr. Gavin’s response in the community two days ago, we can see that the Kusama parachain auction may be coming soon. The long-awaited "beast" seems to be about to break out of the cage, and people have been waiting for this moment for a long time. It can be said that the official launch of the parachain will be a landmark moment for Polkadot. However, after we published "One article to understand the full picture of Polkadot's parachain slot auction and the hidden business opportunities", we were surprised to find that many readers still only have a conceptual understanding of parachains, and know very little about their origins and development prospects. In addition, we have not seen any articles on the market that fully introduce parachains, and today's parachains may have changed more than what everyone knew last year. Therefore, we try to analyze the past, present and future of parachains from all dimensions for the benefit of our readers. Of course, some of the descriptions of parachains in this article may change in the future. If that day comes, we will also update the content.First of all, we need to understand the architecture of Polkadot. Polkadot is essentially a scalable heterogeneous sharded blockchain consisting of a main relay chain and multiple parallel chains. Sharding means dividing a blockchain into different shards. If a blockchain is divided into 50 shards, its efficiency will be increased by 50 times. Polkadot is the ultimate sharding, that is, each shard is actually a blockchain. These blockchains can have different architectures, so Polkadot is a heterogeneous sharded blockchain, while Ethereum is a homogeneous sharded blockchain. Unlike Ethereum, Polkadot has better scalability and compatibility, and it will eventually form a decentralized blockchain network that collaborates with each other. Parachains play a vital role in the Polkadot ecosystem. Each parachain can be optimized for a specific use case with a novel design and dedicated to a specific purpose. They are connected to the Polkadot ecosystem through relay chains to interact, providing interoperability and cross-chain communication services. This provides unlimited possibilities for the future development of parachains. At present, Polkadot officials have stated that Polkadot's early design has about 100 parallel chains that can be connected to the ecosystem, and the endless emergence of emerging Polkadot ecological projects has made the concept of parallel chains clearer. We can understand parachains as independent chains with completely parallel structures in the Polkadot ecosystem. Parallel chain operation principle The high degree of freedom of parachains in the Polkadot ecosystem is one of its biggest advantages. Polkadot's consensus algorithm is inspired by Tendermint and HoneyBadgerBFT. It is a new asynchronous Byzantine fault-tolerant algorithm that can quickly reach an effective block consensus. It supports a larger number of nodes and can accommodate more Byzantine nodes at the same time. For the parachains within the Polkadot ecosystem, based on Substrate, the cross-chain between the Polkadot parachain and the relay chain can be directly realized through the XCMP cross-chain message transmission protocol, achieving information interaction between parachains. Different parachains are like different software in the Adobe series, but they can be interconnected in real time through the system. As for blockchains outside the ecosystem, they are accessed by a bridge, allowing the parallel chains in Polkadot to communicate with blockchains with their own consensus mechanisms, thus enabling communication between heterogeneous blockchains. Major categories of parachains Based on the latest official views on the Polkadot ecosystem, parachains are divided into general parachains and public interest parachains. General parachains refer to private parachains that most ecological projects in the Polkadot ecosystem obtain through auction leasing. We will discuss public interest parachains. In order to maintain and protect the safe and stable operation of the Polkadot ecosystem, Polkadot officially launched on-chain governance to decide through referendum to register parachain slots for public interest parachains. So, what is a public interest parachain? Public interest parachains include system parachains and public function parachains. Common good chains represent chains that can serve the entire ecosystem and can be considered as chains related to the public interest, just like municipal infrastructure. 3.1 System Parallel Chain The system parachain can be used for staking and council elections, governance, and identity verification, as well as balances. It can transfer some functions of the relay chain to the parachain, minimize the burden on the relay chain, and make the entire network more efficient. Its ultimate goal is to make the relay chain a transaction-free system that can handle more parachains. 3.2 Public Function Parachain Public function parachains refer to transfer bridges, or smart contract platforms denominated in DOT/KSM, as well as general asset chains that provide stable and permanent platforms for central bank digital currencies and stablecoins, etc. It adds new public functions to the Polkadot ecosystem, making the entire network more valuable. In Polkadot's parallel chains, if they are generated based on the Substrate framework, they can easily interact with each other across chains because their consensus mechanisms are the same, which is also called isomorphic cross-chain. However, there is another situation, that is, some mature blockchain projects, such as Bitcoin and Ethereum, have different consensus mechanisms from the Polkadot ecosystem and cannot be directly linked to Polkadot. This requires a role as a "translator" in the middle, which is the transfer bridge. The relay bridge is essentially a parallel chain, and its role is like a translator. On the one hand, it makes the relay chain think that the external chain is a parallel chain. On the other hand, by deploying smart contracts on Polkadot's parallel chain and the external blockchain at the same time, it allows the relay chain to interact with other blockchains that are incompatible with Polkadot to achieve cross-chain functionality. At present, for the two projects with the greatest consensus in the field of cryptocurrency, Bitcoin and Ethereum, the official has cooperated with the Interlay team to develop the BTC bridge of PolkaBTC, and has also cooperated with the Snow Fork team to develop the Ethereum bridge. These two bridges do not have tokens themselves, but only provide basic cross-chain needs. They are likely to become one of Polkadot's public function parallel chains. The official is also building a BEEFY (Bridge Efficiency Enabling Finality Yielder) protocol, which allows Substrate chains to use the GRANDPA finality protocol to bridge non-Substrate chains (currently mainly supporting the ETH mainnet). Using this protocol, other parallel chains can easily achieve cross-chain with Ethereum. In the future, I believe that the official will improve BEEFY to target various mature blockchain projects at present. Currently, there is only one relay chain in Polkadot's architecture, and the number of parachains that a single relay chain can carry is limited. The official data given for the time being is 100, but this does not mean that this is the limit of Polkadot. Polkadot's greatest advantage lies in its strong scalability. For example, Polkadot can use one of the parachains as another new relay chain nested on the original relay chain, and the new relay chain can link 100 parachains. It is like Polkadot is a power strip with 100 slots. When the slots are not enough, a new power strip with 100 slots is plugged into the existing Polkadot slots. By analogy, Polkadot can link countless blockchains, and theoretically can achieve unlimited scalability. Polkadot's original canary network, Kusama, is a blockchain with a normal economic and governance system, so it naturally has its own ecosystem. All new features of Polkadot in the future will be run and tested on Kusama. Many projects in the Polkadot ecosystem have also borrowed this idea to create a canary network for their own projects and participate in Kusama's slot auction. Currently, Kusama's ecosystem is also thriving. The official has a follow-up arrangement for Kusama, which is to make Kusama a nested relay chain of Polkadot. At present, the official has arranged a team to specialize in Kusama's switching bridge. Let us wait for more news about the Kusama switching bridge. 3.5 Smart contract platform denominated in DOT/KSM Currently, Polkadot’s relay chain does not support smart contracts, but the Substrate framework behind Polkadot has a smart contract module. Therefore, the parachain on Polkadot can be made into a smart contract platform, but many existing Polkadot ecosystem projects that are smart contract platforms have their own tokens and do not have public attributes. For some developers, they do not want to build a chain, even though it is very simple to build a chain on Polkadot. Therefore, choosing a stable and mature chain to develop on is a rigid demand for these developers. However, if you choose a Polkadot ecological project that is a smart contract platform as the blockchain to carry your own application, you will encounter a problem. If the ecology of this chain cannot be established, will your own application be affected? It is like opening a store in a business district that is not very popular in reality, which will more or less affect the development of your own project. For such developers, finding a smart contract platform that only supports DOT/KSM pricing is one of the solutions. This is also a parachain that the official thinks is very necessary for the public interest. The function of this parachain is equivalent to Ethereum on Polkadot. In the future, many DApp developers who do not want to launch their own chains will consider developing on this public interest smart contract parachain. 3.6 Other general chains (such as general asset chains) Assets are an important part of the cryptocurrency field. Today, the circulation volume of the stablecoin USDT has become the largest cryptocurrency, surpassing Bitcoin. On the other hand, countries are stepping up the research and development of central bank digital currencies. my country has also tested the digital RMB many times and is rapidly promoting its implementation. Therefore, the transaction of these assets will become the biggest rigid demand in the future. It is not appropriate for such rigid demand to be controlled by one of the projects. It is more appropriate to use a public parallel chain to meet such rigid demand. This is also the reason why the official recently launched the Statemint general asset chain. From a certain perspective, public interest parachains have promoted the upgrade and iteration of the Polkadot ecosystem. Simply put, system parachains are like different departments in government work. Under decentralized conditions, they maintain the stability of the Polkadot ecosystem through community governance, while public parachains are like new specific projects that benefit the public, making the Polkadot ecosystem more functional. The current status of the development of parachains How are parachains created? First of all, we need to make it clear that the emergence of parallel chains is not a coincidence. In essence, it is a targeted solution to solve a certain problem. So what problem does the parallel chain solution solve? Anyone who has participated in DeFi will understand the two core issues of Ethereum: congestion and high gas fees. Of course, even if you have not participated in DeFi, you will probably feel what "oil is more expensive than vegetables" means through ERC20 network transfers. However, this problem is not new. It has become a common criticism since various practical applications began to appear on Ethereum in 2017. So, we saw the ETH2.0 solution proposed by Ethereum, hoping to transition from POW (Proof of Work) to PoS (Proof of Stake) to solve the current congestion problem. ETH2.0 essentially uses sharding to solve the problem, and the considerations for parallel chains are the same, but most people may not be aware that parallel chains are a subset of sharding. However, to reach a consensus on the PoS chain, more than two-thirds of the validators must be in complete agreement on everything that happens on Layer 1. Everyone in the network still needs to verify the blocks, which means that the efficiency will not be very high. Therefore, some people have proposed the idea of sharding, which is similar to "outsourcing" part of the work to reduce the workload of the main chain. Therefore, the emergence of parachains is to complete this "outsourcing" work. "Through the cooperation of sharding and proof of stake, parachain hosts can provide comprehensive security on many parachains even without all participants checking all state transitions." But unlike the sharding of ETH2.0, Polkadot's parachain is a heterogeneous sharding solution, but the problems it solves are essentially similar, and this is the birth of parachains. Parachain Current Progress About two years ago, the Web3 Foundation research team began the research and development of the cross-chain messaging (XCMP) function. As an important part of the parallel chain function, the research and development of XCMP has always attracted much attention and made breakthrough progress last year. Although it is still in the transition stage of the HRMP protocol (which can be understood as version 0.5 of XCMP), we can foresee that the real XCMP will soon come. Of course, the development of the parachain also includes the development of the Parachain Development Kit (PDK) tool, which enables developers to easily create a parachain compatible with Polkadot. With the integration of the two major progress, the Rococo test network, which was created specifically for testing the functions of the parachain, was officially launched in August last year, marking the true opening of the parachain. Subsequently, Rococo's V1 version underwent multiple rounds of testing, during which it successfully completed a forkless upgrade, once again proving the benefits of a forkless Runtime, including real access to projects developed with other Substrate. More than 8 parallel chain projects have participated in the test, many bugs have been solved, some functions have been optimized, and the speed issue some time ago has also been resolved recently. According to the official rhythm, more projects will participate in the Rococo test to test and improve more functions of the parallel chain.
On the other hand, according to the launch process of the parachain, some public welfare parachains have already started formal testing. That is why we have received the news that the Kusama parachain slot auction will be officially launched soon. This marks that the parachain is about to usher in a real "parade" and be tested by the market.
The significance of parachains First, let’s take a look at how Polkadot officials view the innovation of parachains? Parallel chains will subvert all existing blockchain technologies because they have the advantages of both Layer 1 blockchain and smart contracts. Compared with smart contract platforms, which are universal, parachains can be used specifically for specific scenarios, such as DeFi, transfers, governance, etc. On the other hand, parachains are more proactive, not simply passive. Smart contract models are generally event-driven and often require human interaction, while parachains can arrange and set logic to execute at a specific time or block height. Compared to Layer 1 blockchains, Layer 1 blockchains cannot interact with other chains easily or quickly. Using and operating a cross-chain bridge is relatively expensive, slow, and difficult to develop. However, all parachains on the same relay chain can interact seamlessly across chains. In terms of security, it is very difficult to gather secure validators or miners for Layer 1 blockchains, while Polkadot's parachains have security provided by the main Polkadot validators. In addition to the official views, we believe that from the perspective of Polkadot's structure and actual situation, there are many advantages brought by innovation. There is an innovative technology behind the parachain - the Substrate framework. Based on Substrate, developers can launch a chain with one click and easily complete the development of the blockchain. In this way, launching a chain is easy and will attract many developers to develop based on Substrate. We have reason to believe that many blockchains will be built on the Substrate framework in the future. What benefits will this bring? Simply put, compatibility in various senses has become stronger, because everyone is based on a set of frameworks. If an exchange has integrated a Substrate chain, it will be much easier to integrate other Substrate chains, or for parallel chains to interact with each other or jointly develop something, it will be much easier because the two are of the same origin. It's like two Sichuanese talking about cooperation, both speaking Sichuan dialect, and at the same time being very familiar with Sichuan's customs and culture, so communication will be much smoother. The significance of parachains to Web3.0 2.1 Parallel chain innovation accelerates the development of Web3.0 For Web3.0, there needs to be an endless stream of landing applications. After the survival of the fittest, some iconic giant projects will eventually be selected to promote the development of Web3.0. The innovative Substrate framework behind the parachain makes chain issuance fast and easy, greatly shortening the project's R&D cycle, allowing it to be implemented faster and accepted by the market, which is the booster for the development of Web3.0. 2.2 The design of parallel chains also enriches the Web3.0 ecosystem Parallel chains break the problem that a Layer 1 blockchain must ensure universality. Because of the existence of cross-chain functions, parachains can focus on certain specific application directions. For example, in the past, when we looked at development, we often only looked at the development of a city, so we might have high requirements in all aspects. We wanted to develop science and technology, industry, agriculture, tourism, etc. If we wanted to develop in all aspects, we would often not be very good in all aspects. Now, domestic development focuses on economic belts composed of multiple cities. For example, several cities in the Yangtze River Delta region can each focus on one area and do well in certain aspects. For example, Shanghai focuses on finance, Hangzhou focuses on science and technology, Suzhou focuses on industry, and Ningbo focuses on foreign trade. Therefore, following a similar idea to split out some of the original blockchain functions into a chain for a specific field or special function can greatly enrich the Web3.0 ecosystem, and because of the division of labor, projects in specific fields can be made more efficient and professional. In fact, Polkadot officials are also following this idea and gradually splitting out some functions on the original Polkadot relay chain into one of the system parachains, such as governance, transfers, etc. This will allow the relay chain to be light and further improve efficiency. Alternatively, the official will support some public parachains that are helpful to the entire ecosystem, such as the BTC bridge project, the recently proposed general asset parachain Statemint, and the smart contract chain Patract. It is worth noting that since it has become easier to launch chains, some DApp teams in the future are likely to consider building a separate blockchain based on their own DApp to run their applications. One chain and one DApp will become very popular. If you pay a little attention to the ecological projects on Polkadot, you will find that most of them are obviously one chain, but they are not universal like the previous public chains. Instead, they are either infrastructure, applications, or platforms. Compared with the general public chains, the diversity of the ecology is self-evident. 3 Vision of Parallel Chain Development Polkadot’s architecture is known for its scalability, which can bring more possibilities. For example, Polkadot’s own relay chain connects many parallel chains, which is actually a sharding structure. Since its different shards are chains of different architectures, Polkadot is a heterogeneous shard, while Ethereum is a homogeneous shard. At the end of last year, the official proposed the SPREE module (Shared Protected Runtime Execution Enclaves shared trusted execution environment). This new feature allows Polkadot to take into account the advantages of both heterogeneous sharding and homogeneous sharding. The basic operating principle of SPREE is that each parachain that uses the SPREE module will have a special area, all of which comply with the rules of the SPREE module on the relay chain, and each parachain cannot modify this rule. This area can be used specifically for operations with high security requirements such as transfers. For example, SPREE is like the Commission for Discipline Inspection of each province, which is not subject to local constraints and only complies with the central government (relay chain). The advantage of this mechanism is that, on the one hand, it allows an application to run on all parallel chains. It is like you are a company and you have developed a mini program on WeChat, a mini program on Alipay, and a mini program on TikTok, and these mini programs are all one application. This achieves homogeneous sharding and improves efficiency. On the other hand, different parachains can be in different fields or have different functions. Therefore, through SPREE, an application can obtain the functions on different parachains and give full play to the advantages of heterogeneous sharding. Or, the relationship between parachains will not be just a cross-chain interaction through the relay chain. For example, many parachains are developed based on the Substrate framework. The same foundation may allow parachains to be connected again in another way without the relay chain. Perhaps it is a tool jointly developed by two chains, or perhaps a chain can launch a tool for all chains to use it because of its own expertise, and this chain will become another blockchain network in another form. Another example is that several chains with different functions jointly launch an application or tool, just like the Yangtze River Delta Economic Zone. Although now it is more of a combination of two projects, we believe that in the future there will be more than two parties cooperating to launch more complex and more comprehensive products or tools. Recently, Polkadot’s official news stated that Parity plans to develop and propose a universal asset parachain called Statemint as the earliest universal parachain of Polkadot and Kusama, and this parachain will have the function of deploying assets such as NFT, stablecoins, and central bank digital currencies. Once it occupies the main asset issuance port, we have reason to believe that Statemint will be a big move for Polkadot. If the previous parachains emphasized functionality, then Statemint seems to be more in line with the user's asset side, which coincides with several popular directions at the moment and is bound to bring more interesting things. After all, an NFT painting was recently sold at Christie's for a sky-high price of more than 60 million US dollars. The world is so magical. The chemical effect that parachains bring to blockchain or Polkadot itself does not seem to have produced real sparks yet, but when we fully understand the ideas behind parachains and the stories that may happen in the future, we can’t help but feel full of more expectations. After all, the blockchain world still needs fresh stories and fresh technologies. Of course, as Polkadot officials improve the functions of parachains, more things like Statemint may emerge, and this is something worthy of our long-term tracking and attention. Artists tell us that "unfinished is the best state", and for doers, unfinished is full of expectations. It just so happens that Dr. Gavin is both an artist and a doer. We have opened a new section dedicated to answering some of your frequently asked questions. You can follow the Polkadot Ecological Research Institute and ask your questions in the background of the official account. We will select some questions and reply in the Q&A section at the end of each article. This issue is mainly about the Q&A of the Polkadot parachain slot auction: Q1: Many Polkadot projects are working on Ethereum bridges, and the official is also working with the Snow Fork team to launch an Ethereum bridge. So will Snow Fork be the only Ethereum bridge in the future? 1. No one stipulates that only one transfer bridge is allowed on the same chain. 2. The Ethereum chain built by Snow Fork will be a public interest chain and will not issue coins itself. 3. There will be multiple Ethereum bridges in the future. It can be understood that Snow Fork is what the system needs in order to meet a public need in terms of functionality. The official will have an Ethereum bridge that represents the public interest. This bridge project does not have its own unique token for this chain; but on the other hand, other projects that make Ethereum bridges will have some other functions and their own tokens, forming another set of ecology. The two can be different, but compatible. Q2: How to choose different transfer bridges? A2: Different bridge projects will definitely have some differences in cost and efficiency due to actual usage, or different bridge projects will bring different functions. For example, the Ethereum bridge in the official public interest parachain may be relatively simple, while other non-public bridges can enjoy some special functions of this chain, or have some special incentive mechanisms. You may as well look at how to choose a bridge from a market perspective and make a choice based on your needs and actual experience. Special thanks: Thanks to PolkaWorld, the first Chinese community of Polkadot, the well-known blockchain media Blockchain Knights, and Patract Labs for their support for this article. |
