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Polkadot is an interchain blockchain project led by Ethereum co-founder Gavin Wood.
According to the Polkadot Wiki, a parachain is an application-specific data structure that is globally coherent and validatable by the validators of the Relay Chain. (Reference: https://wiki.polkadot.network/docs/learn-parachains) Gavin Wood claimed that, once a parachain is developed and the transaction parallelism is achieved, the transaction speed can reach 100,000 TPS to 1M TPS in the future.
Various parachains are being prepared and developed, but in order to actually connect to Polkadot, projects must go through the Polkadot Parachain Slot Auction. Projects that participate in the Polkadot Parachain Slot Auction and win bear the risk of token lockup for 2 years, which is also known as the Parachain Lease Period.
The Polkadot Parachain Auction, which aims to support 100 parachains in the future, started on November 11 of 2021 and has held 9 Parachain Slot Auctions so far, and the total amount locked up until the 9th is 120.9M DOT (about 12% of total circulation). Through the parachain auctions, the circulation of Polkadot is expected to decrease gradually, making DOT an inflation token in the view of cryptocurrency investors.
Projects Won The Parachain Slot Auction
- Acala -The cross-chain DeFi hub and stablecoin of Polkadot
- Moonbeam - An Ethereum-compatible smart contract on a Polkadot parachain
- Astar - Leading DApps hub on Polkadot that supports Ethereum, ZK Rollups, and Optimistic Rollups
- Parallel - A decentralized lending, staking, and borrowing built on Polkadot
- Clover - A Foundational Layer for Cross-chain Compatibility.
- Efinity - A next-generation highway for the NFT industry
- Composable - Liquidity infrastructure for DeFi assets powered by Layer 2 Ethereum and Polkadot
- Centrifuge - A Decentralized Asset Finance
- HydraDX - The Multi-headed Liquidity Omnipool
Currently, major centralized exchanges (CEX) support the Parachain Auctions, and winners are subject to a fast listing.
In the case of Acala Parachain, the first winner of the Polkadot Parachain Slot Auction, a total of 32M DOT was raised from 81,218 participants through crowd loan during the auction period, and Acala is currently available for trading on Binance.
Astar Network (ASTR), a decentralized application hub project that won the third Parachain Auction, is a project to solve the expansion problem of Polkadot, which does not support smart contracts. Astar Network plans to have a scalable and interoperable infrastructure for Web 3.0.
Polkadot is rapidly expanding the ecosystem with the Parachain. However, in the market, its total value locked (TVL) is lagging behind Ethereum, Solana, Avalanche, Terra, and Cosmos. Also, the parachain projects are not so new or special. So, is Polkadot the Ethereum Killer? It can be but it needs a lethal weapon.
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