# Parachain Development

### Your Go-To Overview for Developing a Parachain​

This guide will cover the motivation to build a parachain or parathread, the tools available to facilitate this, the steps to test, and finally, how to launch your network on Polkadot .

### Why Create a Parachain?​

Parachains are connected to and secured by the Relay Chain. They benefit from the pooled security, thought-through governance, and overall scalability of the heterogeneous sharding approach of the network. Creating a parachain can be seen as creating a Layer-1 blockchain, which has its own logic and runs in parallel within the Polkadot ecosystem.

Developers can focus on creating state-of-the-art chains that take advantage of Polkadot's next-generation approach. Some examples of what a parachain could be are:

• DeFi (Decentralized Finance) Applications
• Digital Wallets
• IoT (Internet of Things) Applications
• Gaming
• Web 3.0 Infrastructure

and more.

Polkadot aims to be a bet against so-called chain-maximalism, where the success of Polkadot's heterogeneous multi-chain approach will play a key part in the overall advancement of Web 3.0 and decentralized systems. As a result, Polkadot’s parachain model was designed with the belief that the internet of the future will have many different types of blockchains working together.

### What are the Benefits of Deploying a Parachain?​

The parachain model attempts to alleviate five key build failures of present technology stacks, as described in the Polkadot Whitepaper:

• Scalability: How much is spent on resources and will the network be subject to bottlenecks?
• Isolatability: Are the needs of many accounted for under the same framework?
• Developability: Is the system tooling, system support, and overall system integrity dependable?
• Governance: Can the network remain flexible to evolve and adapt over time? Can decisions be made with sufficient inclusivity, legitimacy, and transparency to provide effective leadership of a decentralised system?
• Applicability: Does the technology address a burning need on its own? Is other “middleware” required to bridge the gap to actual applications?

#### Shared Security (Pooled Security)​

Parachains can lease the security of the Polkadot network by bonding DOT for a parachain slot. This means that the social costs of building a community around your project and convincing validators to participate in your network security are reduced. Polkadot has strong security, and decentralised application projects wishing to benefit from this security would want to become a parachain to share in that pooled security.

#### On-Chain Governance (Thought-through Governance)​

Most governance systems in blockchains use an off-chain governance mechanism. Polkadot's on-chain governance encourages maximum participation of token holders and is frictionless and transparent. It also enables forkless upgrades.

#### Scalability​

The sharded multichain network approach allows for what is essentially parallel computation (processing power) that can process several transactions in parallel. Isolated blockchains are often faced with the network constraint of processing transactions in sequence, causing bottlenecks.

#### Interoperability​

Any decentralised application or chain that wants to enable trustless messaging to other parachains already connected to Polkadot would want to become a parachain. Interoperability between sovereign chains involves certain constraints and complex protocols to enable across a wide breadth of chains.

With Polkadot, you will get this feature out of the box if you build your application as a parachain. The XCM format allows any parachains to communicate by passing messages between them. Furthermore, as bridges to other chains are connected (such as those to Bitcoin or Ethereum) Polkadot's parachains will be able to communicate with these as well.

Please note: Despite the benefits of becoming a parachain, developers should be conscious of the challenges in becoming a parachain, and whether building a blockchain with an end goal of becoming a parachain is a viable one for their project.

On Polkadot, you are able to put your blockchain’s latest block head onto the relay chain. As a parachain, the blocks you submit are verified by validators with a Wasm runtime, which can be stored on the relay chain. You also get the ability to communicate with other parachains using the XCM format: an abstract message passing system. Message passing is tracked on the relay chain - as such, you can prove the delivery of messages and facilitate trustless interactions.

As you can place your blockchain’s latest block head, you can achieve deterministic finalization for your chain. The hard part of reaching finalization for blockchains tends to be the consensus, where, in the parachain model, a blockchain can offload consensus to the overall shared network, and focus on block production. Since the validators have the Wasm runtime for all the parachains, your parachain shares the security of the validator pool with everyone on the relay chain.

Any validator in the validator pool can help validate your blockchain.

## Things to Consider​

### Para-nomics​

#### Digital nation states​

Parachains can be seen as autonomous agents; networks that act as decentralised digital nation states. Parachains have their own communities, rules, economies, governance, treasuries, and relationships with external chains. As a result, the economic policies within parachain ecosystems are subject to the developers and overall community of that parachain ecosystem; there isn't necessarily a go-to economic model a parachain should follow.

Moreover, becoming a parachain has an opportunity cost associated. Ideally, you can increase the value of the network by participating in the parachain selection process, and this should serve as a good return on investment.

#### Connecting digital economies​

Collators act as network maintainers and maintain a full node of a parachain. They are incentivized with a native token payout from:

• Transaction fees collected
• Blocks are naturally produced when a parathread bid is less than the native token payout.

### Para-objects​

        The Relay Chain can host arbitrary state machines, not just blockchains.

The Polkadot network will encourage the connection and interoperability between different para-objects.

Here, para-objects are referring to objects on the network that operate in parallel, generally, parallelizable objects.

These could be in the form of:

### Migration​

Projects that are already functioning as "solochains" or in isolated environments may be interested in migrating onto Polkadot as a para-object. While the parachain model has its benefits, it may not be the go-to strategy for some projects.

As a path for migration onto Polkadot, it may be more viable to migrate to one of the chains in one of the reserved slots.

For instance, there are currently options for smart contract deployment on Kusama through the networks that have secured a slot in the latest slot auctions.

## Implement a Parachain​

The Parachain Implementer's Guide is a significant work in progress and maintained by Parity Tech. The live version is built from the source located in the official Polkadot repository.

### Parachain Development Kit (PDK)​

A PDK is a set of tools that allows developers to easily create a parachain. In practice, the PDK will consist of the following key components:

• State transition function : a way for your application to move from one state to another state.
• Collator node : a type of peer-to-peer node in the Polkadot network with certain responsibilities regarding parachains.

#### Key Components​

The state transition function (STF) can be an abstract way for an application to go from one state to another state. The only constraint that Polkadot places on this STF is that it must be easily verifiable -- usually through what we call a witness or proof. It must be so because the Relay Chain validators will need to check that each state it receives from the collator node is correct without actually running through the entire computation. Some examples of these proofs include the Proof-of-Validity blocks or zk-SNARKs, which require less computational resources to verify than they do to generate. The verification asymmetry in the proof generation of the STF is one of the integral insights that allows Polkadot to scale while keeping high-security guarantees.

A collator node is one of the types of network maintainers in the protocol. They are responsible for keeping availability of the state of the parachain and the new states returned from the iteration of the state transition function. They must remain online to keep track of the state and also of the XCMP messages that it will route between itself and other parachains. Collator nodes are responsible for passing the succinct proofs to the relay chain's validators and tracking the latest blocks from the relay chain. In essence, a collator node also acts as a light client for the relay chain. For more on collator nodes, see the collator page.

#### What PDKs Exist?​

Currently, the only PDK is Parity Substrate and Cumulus. Substrate is a blockchain framework that provides the basic building blocks of a blockchain (things like the networking layer, consensus, a Wasm interpreter) while providing an intuitive way to construct your runtime. Substrate is made to ease the process of creating a new chain, but it does not provide support for Polkadot compatibility directly. For this reason, Cumulus, an added library contains all of the Polkadot adot compatibility glue code.

If you haven't already, get started with Substrate. The best way to get started with Substrate is to explore the Substrate Developer Hub, an online resource built and maintained by Parity Technologies.

#### Cumulus​

Cumulus clouds are shaped sort of like dots; together they form an intricate system;beautiful and functional.

Cumulus is an extension to Substrate that makes it easy to make any Substrate-built runtime into a Polkadot-compatible parachain.

Cumulus Consensus is a consensus engine for Substrate that follows a Polkadot Relay Chain (i.e., parachains). This runs a Polkadot node internally, and dictates to the client and synchronization algorithms which chain to follow, finalize, and treat as correct.

See the Cumulus overview for a more detailed description of Cumulus, and for those with experience in Substrate, give the Cumulus tutorial a try.

Cumulus is still in development, but the idea is that it should be simple to take a Substrate chain and add the parachain code by importing the crates and adding a single line of code. Keep up-to-date with the latest Cumulus developments from the Cumulus section.

Substrate and Cumulus provide a PDK from the abstraction of the blockchain format, but it is not necessary that a parachain even needs to be a blockchain. For example, a parachain just needs to satisfy the two constraints listed above: state transition function and collator node.

Everything else is up to the implementer of the PDK.

Cumulus handles the network compatibility overhead that any parachain would need to implement to be connected to Polkadot. This includes:

• Cross-chain message passing (XCMP)
• Out-of-the-box Collator node setup
• An embedded full client of the Relay Chain
• Block authorship compatibility

Are you interested in building a PDK? See the future PDKs section for details.

### How to set up your parachain​

After creating your chain runtime logic with Substrate, you will be able to compile it down to a Wasm executable. This Wasm code blob will contain the entire state transition function of your chain, and is what you will need to deploy your project to Polkadot as either a parachain or parathread.

Validators on Polkadot will use the submitted Wasm code to validate the state transitions of your chain or thread, but doing this requires some additional infrastructure. A validator needs some way to stay up to date with the most recent state transitions, since Polkadot nodes will not be required to also be nodes of your chain.

This is where the collator node comes into play. A collator is a maintainer of your parachain and performs the critical action of producing new block candidates for your chain and passing them to Polkadot validators for inclusion in the Polkadot relay chain.

Substrate comes with its own networking layer built-in but unfortunately only supports solo chains (that is, chains that do not connect to the relay chain). However, there is the Cumulus extension that includes a collator node and allows for your Substrate-built logic to be compatible with Polkadot as either a parachain or parathread.

### Future PDKs​

Call to Action: Do you want to build a Parachain Development Kit from scratch? The Web3 Foundation is giving grants to teams who are doing this, learn more and apply on the W3F grants page.

One example of a PDK W3F is interested in supporting is a roll-up kit that allowed developers to create SNARK-based parachains. If we review the roll-up write-up, we see that the system uses two roles: users that update state and an operator that aggregates the state updates into a single on-chain update. It should be straightforward to see how we can translate this to the parachain terms. The state transition function for a roll-up-like parachain would be updating the state (in practice, most likely a Merkle tree, which would be easily verifiable) from the user inputs. The operator would act as the collator node, which would aggregate the state and create the zk-SNARK proof that it would hand to a Relay Chain's validators for verification.

If you or your team are interested in developing a PDK feel free to open an issue on the W3F collaboration repository for comment. There may be grants available for this type of work.

## Testing a Parachain​

### Rococo Testnet​

Rococo is a testnet built for testing parachains. Rococo utilizes Cumulus and HRMP (Horizontal Relay-routed Message Passing) in order to send transfers and messages between parachains and a Relay Chain. Every message is sent to the Relay Chain, then from the Relay Chain to the desired parachain.

Rococo currently runs four test system parachains: Statemint Tick, Trick and Track. as well as several externally developed parachains.

### What Parachains are on Rococo Now?​

You can see the list of included parachains here. A list of proposed parachains is available here.

### Obtaining ROC​

ROC are available in the Rococo Faucet channel on Matrix. To receive ROC tokens, use the command:

!drip YOUR_ROCOCO_ADDRESS

### Build and Register a Rococo Parathread​

The parachains of Rococo all use the same runtime code. The only difference between them is the parachain ID used for registration with the Relay Chain.x

You will need to run a Rococo collator. To do so, you need to compile the following binary:

cargo build --release --locked -p polkadot-collator

Once the executable is built, launch collators for your parachain:

./target/release/polkadot-collator --chain \$CHAIN --validator

If you are interested in running and launching your own parathread or parachain, Parity Technologies has created a Cumulus tutorial to show you how. Get stuck or need support along the way? Join the Parachain Technical matrix chat channel and connect with other builders there.

### How to Make Cross Chain Transfers​

To send a transfer between parachains, navigate to "Accounts" > "Transfer" on Polkadot-JS Apps. From here, you'll need to select the parachain node that you are running. Next, enter in the amount that you'd like to send to another parachain. Be sure to select the correct parachain you'd like to send an amount to. Once you've hit the "Submit" button, you should see a green notification, indicating a successful transfer.

#### Downward Transfers​

Downward transfers are when an account on the Relay Chain sends a transfer to their account on a different parachain. This type of transfer uses a depository and mint model, meaning that when the DOT leave the sender's account on the Relay Chain and are transferred into an account on a parachain, the parachain mints a corresponding amount of tokens on the parachain.

For example, we can send tokens from Alice's account on the Relay Chain to her account on parachain 200. To do so, we will need to head to the "Network" > "Parachains" tab and click on the "Transfer to chain" button.

Notice here, that we can select which parachain to send the funds to, specify the amount to be sent, and add any comments or a memo for the transfer.

#### Upward Transfers​

Upward transfers occur from a parachain to an account on the Relay Chain. To proceed with this kind of transfer, we need to be connected to a parachain node on the network and be on the "Network" > "Parachains" tab. Click on the "Transfer to chain" button.

Note that the toggle should be set to off, ensuring that the funds go to the Relay Chain and not another parachain.

#### Lateral Transfers​

Lateral transfers are only possible with at least two different registered parachains. In true XCMP, lateral transfers would allow for messages to be sent directly from one parachain to another. However, this is not yet implemented, so the Relay Chain is helping us deliver messages for the time being. Lateral transfers work through the depository model, which means that in order to transfer tokens from chain 200 to chain 300, tokens must already be owned by chain 200 deposited on chain 300. Lateral transfers are called HRMP, Horizontal Relay-Chain Message Passing.

Before we can send funds from one parachain to another, we must ensure that the chain's account on the recipient chain has some funds in it. In this example, Alice will be sending some funds from her account on parachain 200 to her account on parachain 300.

We can get that parachain account address, from our parachain 300's terminal:

2020-08-26 14:46:34 Parachain Account: 5Ec4AhNv5ArwGxtngtW8qcVgzpCAu8nokvnh6vhtvvFkJtpq

From Alice's account on the Relay Chain, she can send some amount to parachain 200's depository.

Alice is now able to send from her account on parachain 200 to her account on parachain 300.

### How to Connect to a Parachain​

If you would like to connect to a parachain via Polkadot-JS Apps, you may do so by clicking on the network selection at the top left-hand corner of the navigation and selecting any parachain of choice. For the purpose of these following examples, we will be using the Rococo testnet "Custom Node" underneath "Development", following the Cumulus tutorial.

### Parachain Playground​

You can also take advantage of the account functions offered on Polkadot-JS Apps to test the entire Parachain onboarding process (e.g. crowdloans, auctions, registrations).

Start a local node on Westend by running:

polkadot --chain=westend-dev --alice

Substrate-based chains, including the Polkadot and Kusama relay chains, use an SS58 encoding for their address formats. This page serves as the canonical registry for teams to see which chain corresponds to a given prefix, and which prefixes are available.

### Parachain​

To include your parachain into the Polkadot network, you will need to acquire a parachain slot.

Parachain slots will be sold in open auctions, the mechanics of which can be found on the parachain auction page of the wiki.