According to Polkadot.network, Polkadot is a blockchain network that scales by spreading transactions across multiple parallel shards called parachain.
For instance, Take Polkadot as a supercomputer, parachains are like applications that are in physical memory and highly available. It enables Polkadot project and their communities to achieve their aim.
Obtaining a parachain is expensive and has limited slots, which will be auctioned to projects capable of the bond requirements. They are no estimates available at the moment but Polkadot assures an ideal rate of staking at 50% of all Dot. This means that half of the parachain bond will be available to buyers. And the price of every parachain slot is the same.
What is IPO?
Initial Parachain Offering is for projects with less backup to get the bond requirement for parachain slot.
If a project is left with little funds and has the zeal to continue with the dream of obtaining a parachain slot. They can create an Initial Parachain Offering using the substrate crowdfunding. IPO makes such projects eligible to accept Dot loans from Dot holders. Such funds gotten through this process are saved into an account on the Polkadot relay chain.
What is Parathread?
During the Dot loan, If a project doesn’t get enough contribution and lost the auction, the dot will be reversed to contributors instantly. This is where parathread comes in, parathreads are like applications that are on disk and can be copied into memory when needed.
Projects that failed to obtain parachain slots can convert their substrate-based chain to a parathread. Parathread has two similarities with parachain and one difference. Using parathread you “pay-as-you-go” but parachain has “full throughput” and valid for 2 years.
Parathreads are ideal for three types of applications.
- An application seeking an on-ramp to polkadot.
- Application worried about losing parachain slot.
- Applications that have more reads than write.
Both Parachain and Parathreads share some features.
- Full security.
- Instant connectivity.
Parachains and Parathreads are almost the same but if your project doesn’t make it to the parachain slot, going for parathread is a good substitute.