Parachain economics

[lsaether]

Excerpts from Riot:

No parachains will be assigned validators from the relay chain, they must give incentive to actors known as collators, that do the block packaging for that parachain.

what we mean by shared security is that the entire validator set of Polkadot enforces the validity of all parachains, but we only involve all the validators if needed

parachains do not need to implement transaction fees at all, and if they do they can use their own tokens instead of DOTs. They could use DOTs but it's still vague for how or why they would

The relay chain validators need a way to learn about the state of active parachains, because they won't be running full nodes of parachains. So there's an actor called a collator that does the block packaging for parachains and gives the blocks to the validators to verify. The idea is that collators will need some incentive to do this. One of the those incentives could be transaction fees but it doesn't need to be. My point is that transaction fees are one of various methods for sustaining a parachain economy.

"A lot of teams have had questions about building collator communities. I'm starting this room where teams can share ideas about economic models for their parachains. Some ideas to get started: inflation, airdrops, proof-of-work, token-less parachains." @joe, could you please outline the pros/cons of each model, and when they make sense?

[lsaether]

One observation is that for parachains to have governance systems that work well, they will need to have tokens with economic value since otherwise they would be trivial to attack. I don't think parachains can rely on Polkadot's governance stepping in to save them if they get their governance attacked locally, since this would still appear to Polkadot's validators as a valid state transition.

One thing to keep in mind. When would Polkadot's governance system step in for what happens on a local parachain? What would this even look like?