Parallel Threads: A Flexible Scalability Solution for the Polkadot Ecosystem

Parachains are an innovative concept in the Polkadot ecosystem, designed to allow more projects to participate in Polkadot's shared security in a more flexible manner. It enables blockchain projects to temporarily connect to the Polkadot network on a block-by-block basis without needing to lease a parachain slot full-time.

The design inspiration for this mechanism comes from the virtual memory technology in early personal computers. When physical memory is insufficient, the computer can use hard disk space to create virtual memory, thereby expanding the available memory capacity and allowing more processes to run simultaneously, although the execution speed of some processes may be reduced.

In the Polkadot network, some parachain slots will be designated for parachains. These slots do not attach to a fixed parachain but serve as a shared space for parachains to bid to include their blocks in the mainnet. Validators can select the highest bidding candidate blocks from these bids, which not only brings them profits but also maximizes the efficiency of network resource utilization.

From a technical perspective, parachains and parathreads are very similar. Blockchains developed using Substrate can relatively easily switch between three states: independent chains, parachains, and parathreads. Parathreads enjoy the same core advantages as parachains, such as the ability to communicate across chains through XCMP and being secured by the collective of Polkadot validators.

The main difference lies in the economic model. Parachains need to obtain long-term usage rights through governance proposals or slot auctions, while parathreads only need to pay a lower fixed registration fee. However, parathreads need to participate in bidding each time they generate a new block in order to include it in the relay chain. This pay-as-you-go model makes parathreads more suitable for projects with unstable transaction volumes or limited funds.

The economic model of parallel threads has two noteworthy features: first, due to the bidding mechanism for each block, a fee market similar to Bitcoin or Ethereum may form, with fees rising during network congestion and decreasing when idle. Second, unlike parallel chains, registering a parallel thread does not guarantee that blocks will be included, as this depends on the bidding results of each instance.

To incentivize collators (, parallel threads can adopt two methods: one is to use their own token system to pay transaction fees; if there is no local token or its value is low, DOT can also be used; the second is through protocol subsidies, minting new tokens as additional incentives based on block interval time.

Polkadot has also designed a conversion mechanism between parachain slots and parachain threads. This provides a smooth transition option for those parachains whose lease is about to expire or lack the funds to renew, allowing them to continue to remain in the ecosystem in the form of parachain threads, generating new blocks only when necessary.

Overall, parallel threads serve as a flexible scaling solution for the Polkadot ecosystem, significantly improving the efficiency of network resource utilization, providing participation opportunities for more types of projects, and contributing to the long-term healthy development of the Polkadot ecosystem.