Parachains function as Layer 1 appchains built on top of Polkadot’s Relay Chain.
Polkadot, a blockchain developed by Ethereum cofounder Gavin Wood, boasts a unique ecosystem made up of parachains.
Parachains are customizable Layer 1 (L1) networks built on top of Polkadot’s base layer, known as the Relay chain. Each parachain operates independently, and often focuses on a single niche in DeFi, but all of them are connected to the Relay chain, allowing for shared security and interoperability.
Polkadot can support up to 100 parachains.Three of the largest parachains are Acala, Moonbeam, and Hydration.
Moonbeam
Moonbeam is an Ethereum-compatible smart contract platform that was the very first parachain to launch on Polkadot in January 2022. Moonbeam holds $50 million in total value locked (TVL).
Roughly 80% of that TVL is accounted for by Moonwell, the chain’s DeFi lending platform, and another $5 million is deposited on Moonbeam’s leading decentralized exchange (DEX), StellaSwap.
Acala
Acala is a DeFi platform with $108 million in TVL and over 200,000 unique accounts. The network features a cross-chain interoperability bridge and transfer feature, liquid staking, a native DEX, and a portfolio management suite.
In August 2020, Acala raised $8 million in funding from prominent investors including Pantera Capital and Polychain Capital. Since its launch on Polkadot, Acala has gone on to become one of the most widely used parachains.
Hydration
Hydration, formerly known as HydraDX, is a liquidity-driven DeFi protocol and parachain, sitting at an all-time high TVL of $52 million.
The protocol offers lending and borrowing, a unique automated market maker (AMM) system called “omnipool”, and a decentralized stablecoin called HOLLAR.
Hydration TVL – DeFiLlama
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