Polkadot’s auctions for parachains are sure to be a success. They will connect different blockchains together and make the Web3 more decentralised.
If you want to be able to interact with each other without having to trust each other, Gavin Wood, who co-created Ethereum, said that it would be possible. In theory, a platform like this could pave the way for Web3, which would be based on decentralised or distributed network architectures. This would lay the groundwork for a truly open internet where we would not have to give up our data to monopolistic corporations or get permission from them to participate.
From the beginning, Ethereum hasn’t been able to change quickly enough or keep up with the pace. There have been too many problems with transactions for decentralised applications (DApps), and the speed of transactions has been too slow. These problems have been fixed. A year after Wood left the Ethereum team, he came up with Polkadot, which is the framework for a decentralised Web 3.
This year has been a big one for the blockchain of blockchains. Its canary network, Kusama, went live this month, and now its parachain auctions are getting attention. It’s Kusama’s goal to “expect chaos.” And, looking back, it’s clear that the network’s planned chaos during its parachain auctions set the stage for a strong Polkadot foundation and a decentralised Web3 in the years to come.
Part of what makes Polkadot different from Ethereum and other blockchains is that it can talk. Putting a lot of focus on parachains, which are basically parallelizable chains, is a big part of Web 3. This is one of the main ideas behind Web 3. The ability to talk to different systems. Any type of data can be sent between parachains in the ecosystem thanks to Polkadot’s cross-chain compatibility. This opens up new use cases for the system. Thanks to cross-network bridges, parachains can also be linked to other networks, like Bitcoin, Ethereum, and more. Parachains are different from Ethereum’s shards in that they are unique, independent, and designed for a specific blockchain’s needs, unlike Ethereum’s shards, which are all the same and can’t be changed.
Polkadot is built around the Relay Chain, which is the central chain of Polkadot. This chain ensures that other blockchains in the network can work together, allowing developers to build their own private blockchains. While the current relay chain processes transfers, applies governance protocols, and provides staking services for the Polkadot network, an upcoming series of parachains is expected to offer more advanced features, such as better functionality and cross-chain compatibility, for the Polkadot network.
If the Relay Chain is the “hub,” parachains are Polkadot’s “spokes.” This means that each parachain is a separate blockchain that can run its own consensus algorithm, use its own tokens, and more. Because the Relay Chain doesn’t have smart contracts or other special features, parachains are in charge of those tasks.
It’s important to note that parachains don’t have to follow any rules other than the fact that they must be trustlessly checked. Polkadot limits the number of parachains to 100, which makes it hard for projects to connect to Polkadot. To be able to connect, projects that want to be parachains must win a parachain slot auction by paying more than other projects. Once a parachain gets a slot, it bonds Polkadot (DOT) tokens to pay for the rent on its slot (parachain slots are never sold, only leased). There are very few parachain slots and Polkadot wants to focus on high-quality projects, which is why these auctions are so hard to understand or even understandable.
It is said that Kusama was built to be a risky, fast moving “canary in the coal mine” for its cousin Polkadot. The way Kusama puts it:
“It’s a living platform built for change agents to take back control, spark innovation and disrupt the status quo.”
The network claimed to be the best place to test blockchain projects in the most realistic way possible, and you could be forgiven for thinking Kusama looked like Polkadot because it has almost the same structure and architecture as Polkadot. Polkadot’s sharded model has been shown off on the network. Parachain candidates have used it to come up with new ideas and test changes, but it has also been used as a proof of concept.
As part of its scalable multichain architecture, Kusama relies on auctions to make sure its network can grow. Parachains connect to the network by renting a slot on the Relay Chain through a permissionless auction. This way, the Relay Chain can grow with the network. Polkadot first reported on the launch of its parachain auctions, and it said that Kusama had won 11 parachain auctions since June. Since then, more than 2.4 million Kusama tokens have been donated by more than 49,000 unique addresses, which shows that there is a lot of interest in the project.
It also helped Polkadot get ready for its own auctions because there were no problems with the parachain auctions. Polkadot’s success is based on a gradual rollout, and the number of parachains on Polkadot doesn’t exceed 75% of the parachains on Kusama. This is because Polkadot wants quality over quantity. Polkadot will have a bright future because Kusama is a big hit.
Parachain auctions are the first step on the way to a decentralised internet. They start with the auctions on Kusama. Everyone can take part in the parachain auctions, which is what Web3 is all about. Web3 wants to give people more control over the internet, and that is what is happening with the auctions. Polkadot’s auctions for parachains are going to be a success thanks to a lot of testing on Kusama. By connecting different blockchains together, Polkadot will make the Web3 more decentralised. In the future, Kusama is likely to be connected to Polkadot so that people can work together across networks, which is what Web 3.0 is all about.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.