parachains

Parachains are sovereign blockchains that run in parallel to a base layer known as the Relay Chain in a multichain network such as Polkadot. They design their own state transition logic and business rules while benefiting from shared security and interoperability provided by the Relay Chain.

Parachains achieve scalability by processing transactions in parallel to the Relay Chain. They have their own consensus engine and runtime (often compiled to WebAssembly) but rely on the Relay Chain validators to provide finality and security. Parachain blocks are produced by collators and posted to the Relay Chain, where validators confirm and finalize them.

Interoperation is enabled through Cross-Chain Message Passing (XCMP) and the evolving XCM protocol, allowing parachains to send messages and assets across the network. This enables cross-chain smart contracts, token transfers, and shared services without relying on centralized bridges.

Acquiring a parachain slot requires winning a slot auction or using a parathread arrangement, a pay-as-you-go model. Auctions are typically funded through crowdloan mechanisms in which token holders contribute to support a project. A winning bidder obtains a lease on a parachain slot for a fixed duration, after which renewal or different arrangements apply.

Parachains offer rapid customization, governance autonomy, and specialized capabilities, but they depend on the security of the Relay Chain and face risks related to cross-chain interactions and upgrade processes. The ecosystem continues to evolve with improvements to cross-chain messaging, governance mechanisms, and tooling for developers.

Notable examples of parachains include Moonbeam, Acala, and Astar, among others, which operate on Polkadot and Kusama networks. These projects illustrate the balance between shared security and parachain-specific functionality.