What is a Parachain in a Blockchain network?

Charlotte Miller

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In the simplest language, Parachain is those parallel running chains that run along the main relay chain. It is application-specific data, which means the information about its entire system is specifically known to its user. It follows the set of instructions which when commanded on a computer to execute it to operate easily, helps in ensuring the uniformity, governance and security in a Polkadot ecosystem.


Parachain can get converted into a blockchain without being specified as a blockchain, meaning they need not follow the criteria of being a blockchain but can be added to them.

They are useful in creating transactional scalability inside the Polkadot network because they are known to have the following features:

  •       They help in parallel processing of a transaction
  •       They contain a sharable security format for the entire network
  •       They use the XCM messaging format for allowing communication with the other chain in the network, it is a cross consensus message type that doesn’t send actual messages but indicates the performance/action done by the receiver over the other side.
  •       Parachain uses UMP messaging format for communicating with Relay chains.

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How does Parachain work?

Parachain runs in a parallel manner and helps in sending data and information in a cross-chain manner inside the Polkadot system, due to the Cross-network method Parachain is linkable to popularly used external Blockchain networks like Ethereum, Ripple and Bitcoin, etc. Visit Bitcoin Digital Trading App for further details.

Parachain works to bring diversification in the information of transaction details, as they can get linked with blockchains other than the system, it also works on a self-upgradation mechanism where no forking occurs at the node and multiple blockchains can communicate without any intermediate messengers.

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What are Parachain auctions?

Parachain auction is done to decide which external blockchain network will get linked with Polkadot to be a part of its multi-blockchain architecture, the auction is done to enhance the user experience and to perform the Defi functions. Sometimes the initial batch is made of five auctions which will perform under one weekly held Parachain auction. After the launching of the auction, investors are set free to bid on the relay chain of the Polkadot ecosystem.

The bidding process is carried out based on two bidding elements:

  •       Bidding amount
  •       Bidding slot duration

One can participate in the Parachain auction by simply signing up for a crypto trading platform and depositing or buying Polkadot or Kusama crypto asset, and then selecting the ongoing bidding project, adding the contribution amount and then confirming your transaction.

What are Parachain Hubs

Parachain hubs are formed to ensure the network latency between the blocks, now what is network latency, it is a consecutive period of message transfer where an average latency to be reported is of two blocks, one block for transferring the messages and another block for receiving the messages.

Therefore, to ensure the proper maintenance of network latency many Polkadot Projects have come forward to become a Parachain hub which helps in achieving the application composability, the ability of a function to get composed with another application to form a new application.

How do Parachain slots operate?

There are a limited number of Parachain slots which helps in maintaining the On-chain governance of the Polkadot ecosystem, they make use of Cross-network bridging to connect the multiple blockchains.

These slots are allocated in the following manner:

  •       Parachain teams are free to bid by using their token or they can borrow it from their community.
  •       Another way to allocate the Parachain slot is by adapting the Cross-network bridging, where It acts as a bridge to connect several external blockchains.
  •       Parachain slotting can also be done based on Pay-as-you-go transactional model without leasing a parachain slot.


Like the Parachain auction, the Parachain also has an expiration session, where a winner Parachain gets the opportunity to reserve its token until the end of the bidding session.

 Also, It cannot be used for stakeholding, after the completion of the Parachain auction these tokens are considered as unreserved and if they don’t possess a leasing slot, they get converted into Parathreads which works on Pay-as-you transactional model.