Understanding Parachains: A Beginner's Guide to Polkadot and Kusama

Discover what parachains are in the Polkadot and Kusama networks, their architecture, recent updates, and technology behind them in our beginner's guide.

Key Takeaways

Parachains are specialized blockchains that operate within the Polkadot and Kusama ecosystems.
Each parachain connects to a central “relay chain” to enable cross-chain communication and security.
Polkadot’s structure promotes faster and cheaper transactions while facilitating the development of diverse blockchain applications.

Understanding Parachains: A Beginner's Guide to Polkadot and Kusama

What is a Parachain?

Parachains are unique blockchains specifically designed for individual projects within the Polkadot and Kusama networks. They enable users to take advantage of various functionalities that connect seamlessly to a primary blockchain known as the relay chain. This relay chain is vital because, without it, different blockchains cannot effectively transfer assets or communicate with one another.

Each parachain is tailored for particular purposes and often includes its own unique token. Before becoming a parachain on either Polkadot or Kusama, projects must participate in an auction—details on this process can be found on the Polkadot website.

The Polkadot ecosystem consists of multiple independent blockchain shards called parachains, which represent a significant step forward from traditional blockchain architectures. This network fosters a diverse landscape of platforms and communities, reshaping the way we engage online. Notably, parachains on Kusama operate similarly to those on Polkadot, as Kusama was designed to replicate many of Polkadot’s essential features.

Polkadot Architecture

The Polkadot relay chain serves as the backbone of the network, linking and securing parachains while allowing communication with external networks through specialized connections known as bridges.

Visual representation of the Polkadot architecture

Here are the key components of the Polkadot architecture:

Polkadot Relay Chain: This is the core component that provides security, consensus, and cross-chain interoperability to all parachains connected to it. Each parachain benefits from the foundational features this relay chain offers.
Parachains: These are independent blockchains with their own tokens, designed for specific applications. They can link to the relay chain in two ways—by paying for usage or by renting a slot for continuous access.
Bridges: These are specialized blockchains that allow Polkadot's parachains to connect with and operate on other networks such as Ethereum and Bitcoin.

Components of the Polkadot architecture

The architecture of Polkadot enables faster and cheaper transactions for parachain users. It also facilitates the creation of blockchains that can maintain user privacy by not broadcasting sensitive transaction data on a public network.

Recent Developments in Polkadot Parachains

Polkadot frequently shares updates about new parachain launches, projects, and auction events via its newsletter. While Polkadot efficiently connects its native parachains, external blockchains must create custom solutions to achieve similar compatibility.

Bridges, crucial for transferring assets between blockchains, are gaining importance in the decentralized finance (DeFi) environment. However, many existing bridges operate on a custodial basis, meaning they are controlled by central entities.

How bridges work within the Polkadot architecture

In custodial bridges, validators manage secure wallets for executing transactions. While this setup can be flexible, it poses security risks, especially highlighted by recent high-profile bridge hacks.

For more trustworthy bridge functionality, the emerging "light client bridge" enables the target blockchain to directly verify if funds were sent, allowing quicker processing without third-party confirmations. However, these systems can incur higher transaction fees due to necessary on-chain proof verification.

One noteworthy project in this space is Snowfork, an Ethereum bridge that enables users to trustlessly transfer ETH and other tokens between Polkadot parachains and the Ethereum network. Although under development due to roadmap delays, it promises to be fully EVM-compatible, supporting broader interoperability across chains including smart contract interactions with Ethereum.

Snowfork on Github

Currently, while advanced bridges are still being worked on, several custodial options are available for use. Notable examples include:

ChainBridge: A bridge that connects EVM and Substrate-based chains. Developed by ChainSafe, it powers Ethereum bridges for projects like Centrifuge.

ChainBridge architecture

Astar Network: This project is focused on enabling interoperability within parachains and is developing connections with several ecosystems, starting with Cosmos.

Cosmos and Astar Polkadot bridge

Interlay: A project specifically aimed at bridging Bitcoin with Polkadot. Like Snowfork, Interlay is trustless and primarily focuses on providing economic incentives for user engagement.

How Interlay works

The Technology Behind Polkadot

Polkadot is built on Substrate, a comprehensive development framework that simplifies the process of creating customized blockchains tailored to specific needs.

Substrate features a modular design, allowing developers to utilize pre-built components while maintaining flexibility. Some key characteristics of Substrate include:

Shared Ledger: Substrate employs a database structure designed for efficient maintenance of blockchain records.
Peer-to-Peer Networking: Utilizing Libp2p, Substrate facilitates decentralized communication between nodes without requiring centralized management.

Server-based versus P2P network

Transaction Management: Developers can control how transaction dependencies are managed within the blockchain, allowing for complex queue structures.

Linear versus complex queues

Additionally, Substrate supports various consensus mechanisms that can be adjusted easily, even after the blockchain has gone live, providing flexibility during the development phase.

Enhancements in Data Indexing for Substrate

In the world of blockchain, indexing is crucial because it allows users to retrieve historical data efficiently. Projects like The Graph and SubQuery (SQT) are essential for optimizing data queries across blockchain networks.

To move efficiently through data, SubQuery relies on SQT tokens for payment and has created a system of indexers that expedite data organization and retrieval.

SubQuery workflow

Subsquid is another innovative indexing project that utilizes multiple actors—indexers, processors, and gateways—to enhance its data retrieval capabilities.

In summary, the Polkadot and Kusama ecosystems are paving the way for a new era of interconnected blockchains through their innovative architecture and ongoing advancements.