Polkadot [DOT], a blockchain interoperability platform has announced the arrival of its five parachains into its network, marking a pivotal point in the interconnected blockchain technology domain as well as demonstrating its multi-chain capabilities. According to the press release, the name Parachain refers to a set of individual blockchains that runs in tandem with the ecosystem and is now finally released on the network after five years of meticulous research.
The first five to win the slot on the Polkaldot’s relay chain are Acala, Moonbeam, Astar, Parallel Finance, and Clover, which would continue to be under a lease up to 96 weeks at a time. Each of these para chain groups would be focusing on a variety of topics ranging from decentralized finance [deFi] to investments and loans, as well as smart contract functionality. The next batch of para chain auctions will be launched on Dec. 23, this year. and the winners would be announced on March 11, 2022.
It is noteworthy to mention that Polkadot has been hosting parachain slot auctions since Nov. 1, 2021. So, Projects aiming to win a slot host crowd loans to raise DOT tokens and staked the received coins to bid on parachain slots. The first such parachain slot was won by decentralized finance (DeFi) platform Acala with Moonbeam, an Ethereum smart compatibility protocol holding the second slot.
Talking about interoperability, despite the rise of several public blockchains, sending tokens and data across chains poses challenges because every blockchain ecosystem is fragmented and the emerging interoperable bridges are generally considered risky due to their reliance on centralized processes like token wrapping.
Polkadot’s Parachain mechanism
In order to address this interoperability issue, Polkadot‘s network executes cross-chain communication at the protocol level and secures Layer1 parachains through a process called shared security. Speaking more on the parachain model and the value they create in the Web3 domain, Creator Gavin Wood stated,
“The parachain model was created with the belief that the future of Web3 will involve many different types of blockchains working together. Just as the current version of the Internet caters to different needs, blockchains need to be able to provide a variety of services. Parachains solve this.”