8Q Polkadot: How to participate in Polkadot slot auction? When do you start shooting?

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Everyone has always been concerned about the Parachain slot auctions of Polkadot and Kusama. This time, we found some common questions about slot auctions from the community, and concentrated on one answer. If you have these questions, hurry up and take a look~

What is Polkadot Parachain Slot Auction? What is the auction process like?

PolkaWorld: Boca is a relay chain + a bunch of parallel chains, parallel chains can enjoy shared security Boca, and can interact with other parallel chains, it is of great value.

However, the seats for the parallel chains on Polkadot are limited, and these seats are ” slots “. If you want to become a parallel link into the Polkadot project, you need to compete for these seats. How to compete? It is through the slot auction, each project can go to lock the DOT to participate in the auction .

Is it true that whoever locks the DOT can capture the most? not necessarily. Because the slot auction has a set of special game rules, the project party who can understand and use the rules reasonably will have the advantage, so many project parties will formulate a series of auction plans before the auction to improve the chance of successful auction.

The same applies to the Kusama slot auction.

If you want to learn more about the Polkadot/Kusama slot auction mechanism, you can read this article “How to allocate Polkadot Parachain card slots, how to bid, and what is the cost? “.

When will the Polkadot and Kusama Parachain Slot auctions begin?

PolkaWorld: The official has not announced the specific slot auction time.

The following is some official information related to slot auctions:

  • The parachain function is currently being tested on the testnet Rococo
  • Parachain function can be launched after development, testing, etc. are completed
  • Slot auction will start soon after the Parachain function is launched
  • Parachain slot auctions on Kusama will be conducted before Polkadot

PolkaWorld speculates that if all goes well, Kusama slot auction will be held around March this year, and Polka slot auction will be around April . Again, this is just a guess we made based on some existing information and experience. It does not represent official opinions. Don’t take it too seriously. If you don’t go online, don’t hit us.

How do ordinary users participate in the parachain slot auction?

As mentioned earlier, slot auctions need to lock DOTs . These DOTs can be borrowed from many ordinary users in addition to the project side. Generally speaking, the project side will reward their own tokens to encourage these users.

So, if you are optimistic about a project, you can lock your DOT to help them bid and get the project’s tokens .

One thing to note is that these DOTs are locked on Polkadot’s relay chain, not directly given to the project party, and will all be returned to you later. If the auction is successful, these DOTs will be returned after a lock-up period (may be six months to two years), and if the auction fails, they will be returned soon after the auction ends.

Reminder: If someone asks you to transfer DOT directly to TA, saying that they can help you participate in slot auctions or something, 99.99% are scammers. For more information, please see this video “Latest Scam Exposure!” Some Polkadot fans have been fooled…”.

If there are only a few slots (10 or so?) that can be auctioned next year, and then there are more than 50 projects (which Gavin always mentioned in the year-end summary) to bid for slots, is it foreseeable that there will be many projects because there is no auction to insert Groove becomes meaningless?

PolkaWorld: We don’t think these projects will become meaningless.

First of all, the principle of the slot auction is to ensure that the maximum number of DOTs locked in the slot within 2 years . This means that the final bid for the slot is not necessarily a single item, but may be a combination of 1 to 4 items . For example, Acala bids for the first year, ChainX bids for the first 6 months of the second year, Plasm bids for the second 6 months of the second year, and the two-year bids of their three projects add up to the highest, then the actual gain The two-year use rights of this slot are Acala, ChainX and Plasm.

Second, even if the slot is not auctioned, Polkadot provides other solutions . You can choose parathread access, or use the smart contract chain that auctions to the slot, or the system parachain provided by Polkadot.

Third, even if these dapps or projects become meaningless at some point, the design of the Polkadot parachain slot itself will ensure that those parachains that are meaningless, obsolete or obsolete are stopped , so that they will not Continue to occupy the resources of Polkadot, so that new and more “efficient” parachains can replace them.

So we think these projects will not become meaningless.

Someone pointed out that compared with ICO token issuance, parachain auction is a better way of crowdfunding, but it seems to have nothing to do with equity crowdfunding?

PolkaWorld: The bidding method of parachain is called Parachain Lease Offerings, or PLO for short. Gavin also calls it a crowdload (crowdload) method. In short, you lend your DOT to projects that want to bid on parachains, and then you will receive their native tokens.

The difference with 1co is that when you perform PLO, you do not give up your ownership of the DOT, you just lend it to others and lock it in the Polkadot relay chain, which is very safe. So if this parachain goes bankrupt, you can withdraw your DOT, which is different from most 1co in the past. Developers can take all the funds without delivering anything.

Why do developers/project parties spend money to bid for the slots of the parachain to maintain the security of their chains? Now many projects can also design their own incentive mechanism to find nodes to maintain network security.

PolkaWorld: If you bid for Polkadot’s parachain, you can share Polkadot’s security. Why share the security of Polkadot?

The first is professionalism . Not every team can develop a consensus on the chain. Professional matters are left to Polkadot. Each team only needs to focus on its own business logic design;

Second, the development of highly specialized programs with general smart contracts is very complex and vulnerable to attacks. The chain method will be safer and more flexible ;

Third, it can also achieve interoperability when connected to Polkadot.

Why would anyone lend out their DOTs in a parachain slot auction in exchange for insignificant gains in two years?

PolkaWorld: First of all, it doesn’t have to be 2 years. It can be as low as 6 months , or the time set by the parachain project. It also depends on how long you want to borrow.

Second, please note that if you do not go to PLO, you can get an annualized staking income of about 14%. Participating in PLO means you have to pay the opportunity cost of using DOT for staking . It is true that each parachain project cannot guarantee how much benefit the participants have, but each bidding parachain project will design the token scene and launch its own bidding plan. Participants can conduct DOT lending after careful study.

Third, you can use products that release liquidity to adjust and determine the benefits yourself.

Fourth, as mentioned earlier, PLO is more secure than the 1co method of taking away the user’s funds before delivering anything.

We can already freely distributed intelligent Ethernet Square on the contract, why deploy smart contract on Polkadot it?

PolkaWorld: Smart contracts are not the holy grail of distributed blockchains . At present, we do have a chain like Ethereum, where developers can deploy smart contracts, and each contract meets specific needs. But they do not have excellent performance, cannot be scaled, and do not have real computing power. In fact, smart contracts may become more and more bloated and difficult to upgrade, and they are not free. Just look at how much it costs to deploy and upgrade a product like Maker (currently it probably needs tens of thousands of dollars in eth as gas).

If you want your application to be more specialized, better tuned, better performance and resources, then you will need to create your own blockchain. In Polkadot, we also have a smart contract environment, which is mainly used to extend functions, and the blockchain itself provides real logic for fast lending, decentralized transactions, transfer of funds, and voting functions. . Currently, people like Compound, Flow (creator of Cryptokitties) and many others are moving to Polkadot and creating their own chains.

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