After months of development, the first five Polkadot Parachains launched to the Polkadot network last weekend. The feature will allow for multiple blockchain applications on the ecosystem. Some experts suggest the evolution of competing blockchain networks like Polkadot could threaten Ethereum’s spot as the leading chain for DeFi and DApps.
The five parachains that went live this weekend — Acala, Astar, Clover, Moonbeam, and Parallel Finance — were chosen following successful parachain auctions. All told, nearly 99 million DOT, worth approximately $2.4 billion, was garnered by the five projects during the auction period. Winning projects effectively lease their parachain slots, which last for 96 weeks.
“The launch of parachains on Polkadot represents the culmination of the original vision outlined in the Polkadot Whitepaper (aka the Polkadot Paper) in 2016,” the Polkadot team said in a statement. “The Polkadot Paper outlined Polkadot’s core features and sketched out the network’s sharded multichain design. Parachains are the final piece of core functionality, as outlined in the paper, to be fully launched. How Polkadot evolves from here is up to its community of DOT holders, who will approve any future upgrades via the network’s on-chain governance system.”
The COO of Acala, Bette Chen, said, “After taking a bet on Polkadot and the Substrate framework when we started building over two years ago, we couldn’t be more excited to be launching Acala’s parachain to provide a DeFi platform and native, decentralized stablecoin (aUSD) to the Polkadot ecosystem and beyond.”
The winning projects are focused on a number of use cases, including decentralized finance and lending, among others. The idea of parachains is that each individual network can support different use profiles, all tethered to Polkadot’s Relay Chain.
As noted by The Block Research’s John Dantoni in a recent ecosystem map, there are more than 200 projects focused on Polkadot across 19 verticals.
Ethereum, the network seen by most as the leader of DeFi, has been facing a lot of bad press for its high fees and slow transactions. In addition, leading capital investors like the CEO of Three Arrow Capital, Su Zhu, have openly disclosed their lack of support for the project.
The year has seen several projects move away from the Ethereum network to other layer-1 blockchains like Solana and Polkadot. Without a doubt, the launch of parachains will bring Polkadot into the race of blockchains seeking to take Ethereum’s crown as it brandishes the mantra of interoperability.
Polkadot was already popular for having no transaction fees and will likely gain more traction with these new features. However, with Ethereum 2.0 many months away and a short-term solution to fix gas fees unlikely, Ethereum faces a stiff rivalry ahead. According to a website that tracks auction performance, a series of additional Polkadot parachain auctions are currently ongoing.