Blockchain protocol Polkadot (DOT) failed to impress investors over the weekend as it launched its first set of parachains, or individual blockchains running in parallel within the Polkadot ecosystem.
While Polkadot’s utility token DOT was relatively flat on December 18, the day of the launch, it is in the red on Monday, December 20.
At 8:22 UTC, the 10th coin by market capitalization is down by 3.8% over the past 24 hours and 17.1% over the week, trading at around USD 24.51. The coin is down by 41% over the month, and up by 359% over the year.
According to an announcement shared with CryptoNews.com, the parachains have been in development for some five years, and their launch “marks a major breakthrough for interconnected blockchain technology.”
Slots for the first parachains, which are focused on various niches from decentralized finance (DeFi), to investments and loans, as well as smart contracting, were allocated to teams via auctions, with the winners including Acala, Moonbeam, Parallel Finance, Astar, and Clover.
Among those parachains, Acala will “provide a DeFi platform and native decentralized stablecoin (aUSD) to the Polkadot ecosystem and beyond,” said Bette Chen, co-founder of Acala.
Conceived by Ethereum (ETH) co-founder Gavin Wood, Polkadot was launched in 2020 with a mission to solve interoperability problems between blockchains. To achieve this goal, the team said, Polkadot’s layer zero chain Relay Chain will support 100 parachains that work in parallel to create an interoperable ecosystem.
“No single blockchain design works optimally for every use case. Each chain comes with trade-offs making it good for some applications and not others,” said Wood. “The parachain model was created with the belief that the future of Web 3 will involve many different types of blockchains working together.”
Polkadot will allocate other parachain slots in batches over the coming months, with the next batch beginning on or around December 23, 2021. The second batch will feature six auctions, with the six winning parachains poised to be onboarded “on or around March 11, 2022.”