With the global crypto-market cap down by over 0.64%, Wednesday started off as a gloomy day for most large-cap coins. Nonetheless, like always, there were a couple of exceptions and Polkadot was one of them.
The 8th-ranked alt by market capitalization managed to appreciate by more than 15% in a 24-hour window. In fact, it was trading well above $40, at press time.
As highlighted in a recent article, the state of most of DOT’s metrics has been quite impressive too. Thus, the current price rise phase comes as no surprise, given the favorable on-chain environment.
The parachain buzz has been making a lot of noise lately. People from the community are quite excited about the same. But, is it all worth it?
Essence of parachains
With the presence of over a thousand public blockchains, the crypto-space has been transforming itself into a multi-chain universe. One where each chain specializes in something.
Interoperability has, however, been a major hindrance in the space and in effect, has made the market look even more fragmented than it actually is.
Polkadot, with its distinctive approach, has been trying to solve this very problem. The protocol has been designed to operate two different types of blockchains. The first type is a relay chain [the main network] where transactions are usually permanent in nature. The other type [parachains] is usually created by users and directly feeds into the main blockchain to benefit from its security.