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A Year in Parachains, Part 2: System Chains, Smart Contracts, & Social Media

February 9, 2023 in Polkadot, Parachains
Avatarby Polkadot

It’s been just over a year since parachains first launched on Polkadot, and already the network boasts the largest ecosystem of use-case specific blockchains in the world. Since the first slot auctions took place in November 2021 and the first parachains began onboarding to the network the following month, 38 parachains have joined Polkadot, with an additional 43 parachains on Polkadot’s canary network, Kusama, for a total of 81 across the Polkadot ecosystem.

Over the past year, Polkadot’s first parachains have been busy rolling out and upgrading their technologies, demonstrating the power and flexibility that Polkadot provides with the parachain model, which gives teams a competitive advantage by enabling them to fully customize their own layer-1 blockchain in the optimal way for their use case, with industry-leading upgradeability and interoperability capabilities.

Showing the potential of Web3 to fuel innovation across a wide range of use cases, Polkadot’s ecosystem of parachains is now buzzing with activity across DeFi, smart contracts, social media, decentralized identity, IoT, gaming, the metaverse, sustainability, and more.

This series of posts provides a brief overview of Polkadot’s parachain landscape in its first year since launch, starting in Part 1 with a look at Polkadot’s DeFi (Decentralized Finance) parachains, and continuing here with a look at Polkadot’s system parachains, smart contract, and social media parachains, featured in the order that they won a parachain slot auction.

Polkadot’s system parachains

Polkadot’s industry-leading on-chain governance system can grant parachain slots to blockchains that benefit the entire network, provide a core service to the ecosystem, and which typically use Polkadot’s native token, DOT, rather than introducing their own token.

These system parachains, which typically provide basic, core functionality to the community on a not-for-profit basis, do not need to go through the parachain slot auction process and are governed by Polkadot’s Relay Chain governance system. See here for a recent look at the roadmap for some of Polkadot’s system parachains.


Onboarded December 18th, 2021

The ability to create and transfer assets is a basic need for the Polkadot ecosystem, so it makes sense to provide some basic asset functionality as a core public service for the network.

The first system parachain to launch on Polkadot, Statemint provides that essential asset infrastructure. It allows any entity to deploy assets, including NFTs, offering generic multi-asset functionality for a range of use cases, and uses DOT as its native token.

Assets created on Statemint can fall under three basic categories: assets backed by the utility of an on-chain protocol (such as an asset that grants voting rights or access to a network), assets with an off-chain backing (such as off-chain reserves or real-world assets like artwork), or assets with no backing.


Onboarded November 19th, 2022

One of the basic functionalities needed for Web3 is the ability for people to come together from around the world and organize as a group without needing to trust third parties like lawyers and courts. Collectives, Polkadot’s second system parachain, provides this functionality for the Polkadot ecosystem.

The first collective to launch on the Collectives parachain was the Polkadot Alliance, a community initiative created to recognize positive contributions to the ecosystem and set a code of ethics around scams, malicious behavior, misuse of the Polkadot brand, and unattributed code. The Polkadot Fellowship was the second collective to launch, a decentralized group of Polkadot technical experts that plays a crucial role in Polkadot OpenGov, the network’s next-generation governance system.

Polkadot’s smart contract parachains

The Polkadot ecosystem is paving the way to a truly interoperable Web3 with a robust and growing landscape of smart contract options. Polkadot currently features several smart contract parachains spanning both Ethereum compatible (EVM) options as well as native WebAssembly (Wasm) smart contracts for added performance.

Smart contracts on Polkadot are natively interoperable across chains, ending the era of siloed networks and forming the basis for an interconnected ecosystem of cross-chain Web3 integrations. Smart contract options on Polkadot feature platforms that are specialized for specific use cases, such as DeFi or commodities.


Auction 1: Onboarded December 17th, 2021

Acala is an all-in-one DeFi hub boasting a suite of applications for end-users, as well as a stablecoin (aUSD) and a smart contract platform for DeFi developers to build their projects on.

Acala is inherently interoperable and Ethereum-compatible, and is fine-tuned to offer optimized DeFi and hybrid finance (HyFi) applications. Blending the performance, flexibility, and interoperability of Substrate with Ethereum compatibility, Acala is designed to unleash the vast potential of DeFi, enabling applications to scale and tap into the flexibility and multichain integrations that Polkadot unlocks.

The Acala team rolled out their suite of products in 2022 and emerged as one of the top performing DeFi parachains on Polkadot with over $200 million in TVL and a total of 70,000+ cross-chain transfers completed with other networks.


Auction 2: Onboarded December 17th, 2021

Moonbeam is a cross-chain connected smart contract platform that makes it easy to build multichain dapps on Polkadot using familiar Ethereum tools.

Conventionally, the siloed nature of blockchain ecosystems has required Ethereum smart contracts and dapps to be modified or completely rewritten to work on different chains. However, as an EVM-based smart contract platform, Moonbeam enables users to build or redeploy smart contracts to Polkadot without reconfiguring and even extends their functionality with features like on-chain governance, staking, and cross-chain integrations.

Less than a year after launch, Moonbeam reached 14.6 million transactions, 1.5 million unique addresses and 3k+ ERC-20 tokens on the network, as well as 9 integrations via XCM with other parachains, making it the most active network on Polkadot. 300+ projects, integrations, and collaborations are already building in the Moonbeam ecosystem. Moonbeam was highlighted by Electric Capital as one of the fastest-growing blockchain ecosystems with a 27% growth in full-time developers in 2022.


Auction 3: Onboarded December 17th, 2021

Astar Network offers infrastructure for building dapps based on both EVM and Wasm smart contracts, and was the first parachain to offer Wasm functionality on Polkadot. Designed to be multichain first with true interoperability both within and external to the Polkadot ecosystem, Astar provides developers with a full-featured smart contract platform. Astar’s industry-first Build2Earn model also enables developers to earn tokens for the dapps they build through an innovative dapp staking mechanism.

Astar has emerged as a leading force in the Japanese Web3 space, named product of the year in 2022 by the Japan Blockchain Association, and with Astar’s founder gracing the cover of Forbes Japan after being named person of the year. The network has already had 50+ dapps created on its platform, and has announced collaborations with Toyota and NTT Docomo, Japan’s largest mobile phone network.


Auction 13: Onboarded March 11th, 2022

Phala is a next-generation decentralized cloud computing network built to power Web3 with security, scalability, and cost-effectiveness at the heart of its offering, designed to bring decentralized compute cloud to the masses.

Users are able to purchase computing power from node operators who provide resources to the network. By tapping into Trusted Execution Environments (TEEs) within modern computer CPUs, node operators cannot see or tamper with data stored on their machine, ensuring data privacy. Phala’s Turing-complete smart contracts reinforce the protection of managed programs on the network, and are complemented by an off-chain programming model dubbed the “Phat Contract”, a software for Web3 backends. Phat Contracts are inexpensive, have zero latency, offer privacy and a serverless SDK, and can maintain high-end computation across multiple services without congesting the blockchain.

In addition to Phat Contract, Phala also launched PhalaWorld in 2022, a digital experience showing a user’s progression on the Phala Network based on soul-bound NFTs. Over the past year since launch, Phala has gone from several hundred off-chain computation workers to nearly 20,000 running over 140,000 virtual CPUs.


Auction 21: Onboarded August 28th, 2022

Establishing interoperability between blockchains from the ground up is something that many networks and solutions have struggled to achieve, or at least securely maintain for significant periods of time.

Darwinia is a cross-chain protocol and smart contract platform that aims to be a hub for cross-ecosystem bridges on Polkadot, with bridges for connecting the ecosystem to networks like Ethereum and Cosmos. Darwinia provides a light-client-based universal cross-chain messaging infrastructure for decentralized applications.

Many cross-chain bridges aren’t interoperable from the ground up and are often temporary solutions to network congestion and steep transaction fees. Leveraging Substrate/Polkadot, Darwinia is natively interoperable, bringing trustless cross-chain token swaps, exchange and market functions to users. With Darwina infrastructure single-chain applications (DeFi, DEX, GameFi, etc.) are able to upgrade to cross-chain versions, broadening their capabilities.


Auction 26: Onboarded August 28th, 2022

The Aventus Network (AvN) is an enterprise-focused parachain designed to help bridge the gap between blockchains, offering a cross-chain interoperable smart contract platform, including layer-2 architecture to connect with Ethereum. AvN gives users access to a myriad of business use cases including supply chain, video games, and loyalty schemes.

AvN will serve multiple industries and sectors in the Web3 era. The network is already collaborating with FinTech, NFT, and airline projects looking to improve their services. In these instances, AvN has increased net margins, lowered transaction fees, and upgraded treasury management amongst other benefits.

In addition to completing their onboarding process in 2022, Aventus also achieved carbon neutral status with a carbon offset program.


Auction 27: Onboarded August 28th, 2022

The conventional commodities market is facing crucial sustainability issues, with record prices, scarcity, and unethical approaches like child labor and others that negatively impact the planet, resource-owning communities, and consumers.

Watr is an open ethics-driven platform for programmable commodities, connecting commodity flows with a robust ecosystem of participants, also encompassing commodities financing and trade. Intended for both retail and enterprise markets, Watr is reimagining finance and trade through the lens of inclusivity, transparency, and sustainability.

Watr combines several functionalities, including a smart contract platform, decentralized identity, supply chain and provenance tracking, and zero-knowledge proofs, to create a full-featured open platform optimized for ethical commodities. Existing initiatives being built on Watr include a partnership with Flowcarbon to launch its carbon tokenization technology for traceable and transparent carbon markets.

Polkadot’s social media parachains

Perhaps the greatest success and failure of the Web2 era, social media is an industry dominated by a few tech giants that control user data and access to information with little accountability or oversight, turning users into products for their own financial benefit. Web3 provides a unique opportunity to revolutionize social media, putting control back into the hands of users, and Polkadot parachains are making several important strides in making that better future a reality.


Auction 33: Onboarded November 21st, 2022

Frequency shifts the Web2 paradigm with a social media optimized parachain giving users full control over their data. As the first implementation of the Decentralized Social Networking Protocol (DSNP), an open, public social networking protocol that can be used to power several social media platforms, Frequency offers a means to democratize and decentralize social media, providing the tooling to fuel a new wave of innovation in social networks. DSNP will allow users to switch between social media platforms at will while maintaining full control over their data and their social connections, so they don’t lose their social graph when moving to a new network.

Frequency is designed to scale decentralized social networking apps, with low, predictable costs and coinless interaction, as well as off-chain data broadcasting capabilities that maximize throughput and reinforce openness and transparency.


Auction 37: Onboarding February 13th, 2023

Among the first projects to start building in the Polkadot ecosystem, Subsocial is a Web3 social media protocol and platform that empowers developers to launch decentralized censorship-resistant social networks. Many social networks can run on the Subsocial chain, which provides shared networking standards. Users are free to post, create, manage, and monetize their content free from third parties, have full control over their social graph, and can even set their own content moderation preferences.

Leveraging both Substrate and IPFS (for storage), the platform invites developers to build social dapps where user-generated content is user-owned and data can be shared between dapps. Dapp creators on Subsocial can also remove the need for their users to interact with tokens.

Subsocial has created several partnerships, collaborations, and integrations across the Polkadot ecosystem, including integrations with Crust Network for data storage and with Polkadot governance platform Polkassembly.

Kusama parachains

Beyond the parachains currently on Polkadot, an additional 43 have joined Kusama, Polkadot’s canary network. Kusama is where brilliant builders come to innovate, providing a live, value-bearing environment for teams to battle-test their technologies and mitigate risk, build a community, and develop partnerships before a production deployment to Polkadot, or to build and iterate more experimental use cases.

Current use cases on Kusama generally mirror those on Polkadot, with an added focus on DAOs (Decentralized Autonomous Organizations) and Artificial Intelligence:

Many teams maintain a parachain on both Polkadot and Kusama, using Kusama to battle-test new technologies before rolling out upgrades to their Polkadot mainnet.

What’s Next?

Despite the difficult year for blockchain in 2022, the Polkadot community and ecosystem delivered several key innovations over the past year, and now boasts the largest ecosystem of layer-1 chains, with over 300 decentralized applications already built on top of them, as well as the largest community of full-time developers outside of Ethereum.

With a ton of new projects in the pipeline, new parachains will continue rolling out over the next year and beyond, and existing parachains will continue building on their recent successes, rolling out new technologies and onboarding a new wave of Web3 end-users.

Several key technologies are also in development for Polkadot, which will push the capabilities of parachains and dapps even further, including trustless interoperability with external networks with the rollout of XCM v3 and the Bridge Hub parachain. With everything that’s happening in the Polkadot ecosystem, 2023 is shaping up to be the biggest year yet for Web3 innovation.

Read Part 3: Data, ID, Privacy, Storage, & Infrastructure

Read Part 4: Part 4: Sustainability, IoT, NFTs, Gaming, & Metaverse

Interested in developing for or building on Polkadot? Get in touch for hands-on support.

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