Kusama rallied over 100% since it announced the Parachain auctions in June 2021. Now think about the enormous benefits of investors who lent their $KSM tokens to the first parachain auction winner Moonriver.
If you invested 1 $KSM in the first Moonriver crowdloan, you would have received almost 15 $MOVR tokens, which is worth USD 5,700 now. That is a 100X return, and after the lock-in period, you get back your 1 $KSM. Want to get involved? Mark your calendar for November 11th, as the Polkadot Parachain Auctions is starting on this date.
You can book such massive gains or even higher. But what is parachain? What is a crowdloan? Which projects are competing for Polkadot Parachain auctions? What does it mean for $DOT holders?
In this article, you’ll discover everything about Polkadot Parachain Auctions.
What are Polkadot’s Parachains?
Parachains are layer-1 blockchains on Polkadot. They connect to the Polkadot Relay Chain for security, scalability, and interoperability. Moreover, they get a say in Polkadot governance and link to external blockchains like Bitcoin and Ethereum using cross-network bridges.
Consider a parachain slot to be a parking place in a tiny lot near to a stadium. Because of each parking place’s value to each automobile owner, these slots will be in great demand and difficult to get. Polkadot is the same way, especially now that the first spaces are available.
Approximately 100 parachain slots are available on Polkadot as of now. And winners of parachain slot auctions get some of these slots. The remaining slots go to Common goods parachains and parathreads. Common-good chains are the parachains that benefit the entire network.
How Do Parachain Slot Auctions Take Place?
Parachain auction is a 1-week candle auction that is one auction that takes place every week. Polkadot governance leases individual parachain slots for a period of up to two years.
At the end of this period, the slot will go back for auction, and the team bids for a slot again. These slots are fungible, and teams can secure an adjacent slot before their current lease period ends.
Therefore, this implies a constant demand for $DOT tokens for the coming years. Because ideally, $DOT is the rent you pay to live on Polkadot. Think of the rent getting finalized in auctions. This forms a cascade of network effects on $DOT and the ecosystem.
What is a Crowdloan and How to Participate in It?
A crowdloan allows a team to crowdsource $DOT tokens for Polkadot slots, or $KSM tokens, for Kusama slots to bootstrap its parachain auction.
To participate in a crowdloan, users need to lock up $DOT for two years. At the end of this period, users get their $DOT unlocked. And even if the project fails to win a slot, it takes only a few days for the $DOT unlock.
Remember that Parachains are the last piece of the core functionality of Polkadot. It is the key for Polkadot to realize its scalable multi-chain architecture.
On the other hand, Polkadot will begin the auction on November 11th, continuing for a week. This process goes on until all the slots are sold.
Auction #1: November 11th — November 18th, 2021.
Note: users don’t have to send $DOT from their wallets to participate in a crowdloan. So legitimate teams conducting a crowdloan don’t have to ask you to send your $DOT to an address.
Therefore, let’s take a look at the most critical crowdloans platforms on Polkadot:
Acala Network is the DeFi hub of Polkadot. It is an Ethereum-compatible platform for smart contracts. The platform offers a trustless staking derivative (liquid $DOT), a multi-collateralized stablecoin (aUSD), and an AMM DEX. This platform is considered the close relative of Karura.
Acala has partnered with ChainLink, Moonriver, Shiden Network, etc. Major investors like Digital Currency Group, Polychain Capital, Alameda Research, and Coinbase Ventures have invested in Acala. Since its inception in 2019, Acala has stayed true to its roadmap also.
Acala’s native token is $ACA, with a supply cap of 1 billion tokens. You can join the waitlist and newsletter to get a 7% bonus $ACA rewards.
Astar is a scalable, interoperable, and decentralized Web3.0 platform. It is considered the Polkadot-native dApp hub supporting Ethereum, WebAssembly, dApp Staking, and Layer2 solutions.
It is closely related to Shiden Network, winner of Kusama’s Auction #3. Shiden is a Multi Chain dApps Hub on Kusama. Astar has 150,000 ETH as Total Value Locked (TVL), a 30,000 community, and more than 40 projects on its ecosystem. It aims to connect Ethereum and Cosmos blockchains to the Polkadot ecosystem.
You can follow this link for Astar crowdloan registrations.
Centrifuge connects assets to DeFi such as invoicing, real estate, and royalties. Nowadays, it has USD 36.6 million in TVL. In other words, borrowers can finance their real-world assets without banks or other intermediaries. Also, providing liquidity is open to everyone, where investors receive a return $CFG rewards.
This decentralized platform aims to help dApps on Ethereum to use data from other chains. Altair, the winner of the 9th auction on Kusama, is the relative project of Centrifuge.
Therefore, $CFG is the native token with a supply cap of USD 430 mn. $CFG is available on Coinlist and CoinEx and is trading at USD 2.04.
Join the waitlist for centrifuge crowdloan on this page.
Darwinia Network connects heterogeneous chains to build the next generation of Web3.0 Metaverse. This decentralized platform provides an entrance to the Polkadot ecosystem for projects that have been deployed on public blockchains such as Ethereum and BSC.
Gavin Wood has praised Darwinia as one of the “most noteworthy Polkadot ecological projects.”
On the other hand, its native token, $RING, has 504 million tokens as a circulating supply and 10 billion as a total supply. $RING is available on Gate.io at 5 cents.
Moonbeam is the relative project of Moonriver, Kusama’s second parachain. This project helps to build decentralized applications on Polkadot. Therefore, Moonbeam dApps can integrate with Bitcoin and Ethereum too. Its native token is $GLMR, which has a total supply of 1 billion tokens.
On the other hand, this platform support Solidity, Vyper, and anything that compiles to EVM bytecode. Also, users can apply Ethereum-based tools like MetaMask, Remix, Hardhat, Waffle, and Truffle.
Litentry is a Decentralized multichain identity aggregation protocol. With Litentry, users can manage their identities and get real-time credit. This platform is built on Substrate, which inherits outstanding features and top Blockchain technology.
Litentry aspires to be a Polkadot Network Parachain, benefiting from the robust cross-chain ecosystem and common security. Its native token, $LIT, has a supply cap of 100 million tokens. Nowadays, $LIT is available on Binance and is trading at USD 5.59.
You can participate in Litentry crowdloan with an additional 2% bonus reward on the page in the background.
Efinity was built by Enjin, the pioneers in the NFT gaming space. Therefore, Efinity announced its participation in parachain auctions, and the Enjin community received the news.
Also, Efinity is trying to solve some of the problems faced by the NFT space. It will provide a user-friendly platform for the mainstream NFT experience. Further, it helps developers to build their NFTs on flexible smart contracts. For users and collectors, Efinity is offering an interoperable platform with negligible gas fees.
As Efinity makes NFTs accessible for all, the overall NFT adoption is likely to go up. Its native token, $EFI, is currently trading at USD 1.64 and is available on Crypto.com, OKEx, Gate.io, and Hoo.com.
The latest Polkadot Parachain Auctions is Parallel Finance. The main goal is to innovate and bring DeFi to the next level. The platform is creating the most secure and easy-to-use decentralized platform to empower
everyone has access to financial services, offering lending, staking, and borrowing products to users.
Also, Parallel Finance is launching DeFi Chain On Kusama and Polkadot, having a colossal scalability capacity to attract general crypto users. You can join the Parallel Finance crowdloan waitlist on the page showing up on the screen. The waitlist has 400k participants already.
Major firms like Polychain Capital, Alameda Research, and Pantera Capital have investments in Parallel Finance. Native Token $PARA has a total supply of 1 billion.
Now you have a clear idea about Parachains and the auctions. But still, some of you might find it too technical to participate in crowd-loans. And we understand many of the crypto users are comfortable with centralized exchanges.
So Kraken has come up with native crowdloan participation. You can lend your $DOT to the Parachains with your Kraken account for five projects. Sounds good, right. But what if you want to participate in some other project or are confused about joining Crowdloans for projects that Kraken doesn’t support. For that, you have us.
In addition, we hope you’ve learned many things about Polkadot Parachain Auctions.