What role will important players such as crypto funds and exchanges play in the Polkadot Parachain auction?
Written by: OKEx
Parachain auctions are on the verge, and the Polkadot ecology is very lively.
According to the latest official news, the parachain testnet Rococo has launched the public welfare parachain Statemint and has begun test asset issuance. Acala, Zenlink, ChainX, Bifrost and other projects have issued test tokens on the Statemint testnet.
And this is just a prelude. According to the plan, Kusama and Polkadot mainnet will successively open parachain auctions. By then, not only will more project parties participate in the competition, but also many institutions and investors will be attracted to join the industry to witness this industry event.
The market has long been aware of this: DOT has risen to a maximum of US$48.381 since the beginning of the year near US$8, while KSM has repeatedly set highs recently, becoming one of the few bright spots in the volatile market.
On the other hand, in the primary market, Polkadot’s ecological projects are frequently financed, accounting for almost half of the total amount of financing in the entire market. Funds from all walks of life take the lead in deploying, and together with many emerging projects, they have become an important builder of the Polkadot ecology.
OKEx Blockdream Ventures is a typical representative. As an investment brand under Ouyi OKEx, the fund has invested in more than 10 Polkadot ecological projects since its establishment at the beginning of the year, including Plasm and Bifrost, which won the Parachain slot of the Rococo testnet, as well as the recent big fire Dora Factory.
OKEx Blockdream Ventures part of the investment project
For the project party, with the blessing of OKEx Blockdream Ventures and other institutions, it can obtain funding and resource support at the same time. It can participate in the parachain auction in the short term, and it can better participate in the ecological construction of Polkadot in the long term.
On the eve of the parachain auction, we may wish to re-examine Polkadot, the cross-chain leader, and at the same time sort out the important promoters of Polkadot’s ecology.
Why does the Polkadot ecology continue to be hot?
Outside of Ethereum, which public chain is the most anticipated? The answer is undoubtedly Polkadot.
As a cross-chain leader, Polkadot has always been regarded as a representative of “Blockchain 3.0”, and it is responsible for the interconnection of Wanchain. Although its “relay chain + parachain” network architecture has not yet actually operated, the token DOT price The tide has risen.
According to the Ouyi OKEx market, DOT has accelerated its upward trend since December last year. It rose to a maximum of US$48.381 on April 17 this year. It increased by more than 10 times in three months. It once broke into the fourth place in the global cryptocurrency market value list, second only to BTC, ETH and USDT.
Dora, the founder of OKEx Blockdream Ventures, attributed Polkadot’s popularity to the following three points:
The prospect of cross-chain network is promising
Compared with Ethereum, the two-layer structure of Polkadot relay chain and parachain provides stronger expansion capabilities. Its Substrate development architecture can greatly reduce the cost and difficulty of public chain development and realize “one-click chain distribution”.
In addition, Polkadot can bridge the Bitcoin and Ethereum networks and realize the cross-ecological transfer of assets. It has strong compatibility and is expected to break the information islands between different blockchains.
Strong development team
The founder of Polkadot, Gavin Wood, was the co-founder of Ethereum and the developer of the C++ version of the Ethereum client prototype. He completed the writing of the Ethereum Yellow Paper and invented the Solidity language designed for smart contract development. It is called Ethereum. The “invisible brain” has a deep understanding of the problems faced by public chains such as Ethereum.
Group photo of the founding team of Polkadot, Gavin Wood in the middle
In addition to Gavin Wood, the other two founders, Robert Habermeier and Peter Czaban, also have a strong R&D background, rich experience in blockchain development, and a certain industry appeal. Coupled with the strong support of the Web3 Foundation for the Polkadot ecology, more and more outstanding developers have joined the Polkadot community.
Boka’s ecology is getting better and better
Compared with other encryption projects, Polkadot is superior in terms of ecological construction.
According to PolkaProject statistics, there are currently more than 428 Polkadot ecological projects, covering the underlying technology, wallet, oracle, NFT, DAO, DeFi, Internet of Things, games and other fields. Among them, there are 143 projects based on Substrate, accounting for nearly 33.4%. .
Source: PolkaProject
At the end of 2020, some of the data disclosed by Gavin Wood in the year-end review also directly confirmed the prosperity of the Polkadot ecology: the Rust code base has more than 500,000 lines of code; there are already more than 2,600 developers on the Substrate technology channel, an increase from the beginning of 2020 It has nearly doubled; a total of more than 14 million US dollars of funds have been used for more than 200 funded projects…
These data are precisely the focus of attention of investment institutions. According to Dora, OKEx Blockdream Ventures has been paying attention to popular public chain ecological projects since its establishment, and Polkadot is one of the few public value chains. The cross-chain ecology built around Polkadot is worth looking forward to, and it will continue to explore the Polkadot ecology in the future. “Top Students” in
Of course, there are external considerations for investment institutions to deploy the Boca track. According to Dora, the current DeFi development has entered the deep water zone, and NFTs are also accelerating. This has greatly magnified the performance bottleneck of Ethereum. When ETH 2.0 is in the foreseeable future, emerging public chains such as Polkadot are expected to emerge suddenly, not to mention the current bull market. The market continues, and more funds will be injected into the Polkadot ecology.
Parachain bidding becomes the biggest hot spot
If the Polkadot ecology is a fire, then the upcoming parachain auction is a barrel of oil, and the combination of the two is expected to produce a huge chemical reaction.
What exactly is a parachain auction? Simply understood, Polkadot is composed of a relay chain, a parallel chain, and a transfer bridge. If Polkadot is compared to a plug-in strip, then the computer, refrigerator, washing machine and other electrical appliances are equivalent to a parallel chain, and the jack on the plug-in strip is parallel. Chain slot. Different electrical appliances can operate independently and share power strip resources.
Since the operation of parachains consumes network resources, the number of parachains in the initial stage is limited. In order to ensure fair distribution, Polkadot allows the project party to obtain the right to use the slot through auction.
The project party needs to bid by locking a certain time and number of DOTs to obtain the right to use. This part of DOT can be purchased from the secondary market or raised from investors. After the lease period ends, the locked DOT can be unlocked.
According to Dora, the founder of OKEx Blockdream Ventures, if the project party can become the first batch of parachains, it will not only give priority to sharing Polkadot ecological resources, but also gain huge market attention, which is conducive to later development. Therefore, most projects will use their own code Coins are rewarded to supporters, thereby raising more funds.
Some investors have long been keenly aware of the opportunities, and have been hoarding KSM and DOT since last year. Now that the parachain auction is coming soon, how can these investors use the coins in their hands to support the project and get rewards?
Dora highlighted two methods. One is to use the pledge tool in the Polkadot ecology to directly put the tokens in the hand into a smart contract, which has a relatively high threshold for operation; the other is to use related services launched by centralized exchanges. For example, OKEx’s upcoming card slot auction service allows users to directly lock DOT for supported and promising projects, and the operation is relatively simple.
No matter what method is adopted, the good show that investors are looking forward to is getting closer and closer. On April 7, Kusama officially launched the Parachain Auction webpage, explaining in detail what is Kusama’s Parachain Auction, how to participate, and more frequently asked questions. On April 23, according to official news, the parachain testnet Rococo has launched the public welfare parachain Statemint, and has begun to issue test assets. Acala, Zenlink, ChainX, and Bifrost have issued test tokens on the Statemint testnet.
Various signs indicate that the Parachain auction of Polkadot is about to begin, and a new round of wealth effect is expected to be ignited.
What are the boosting forces?
The reason why the Polkadot ecology is so hot is not only due to the efforts of the Web3 Foundation and the founding team, but also from the joint efforts of the entire market. In general, these forces are divided into the following categories:
Crypto fund
Since 2020, with the launch of Polkadot’s mainnet, investment in Polkadot’s ecological projects has become an important direction. Both top institutions and emerging capital are constantly raising bets on this track.
As a new player on this track, OKEx Blockdream Ventures has a late start, but it has many layouts. Founder Dora revealed that the fund has been exploring star projects in the Polkadot ecology through various channels since the beginning of the year, and has invested in more than 10 projects.
Like other institutions, OKEx Blockdream Ventures is willing to provide resource support and services for high-quality projects, provide value for their development, and accompany and witness the birth of blockchain killer projects. The difference is that OKEx Blockdream Ventures needs to help the ecological layout and traffic growth of the trading platform while cooperating with project investment.
“For high-quality projects, the resources and traffic of the Ouyi OKEx platform can quickly help the project develop, quickly gain market attention and increase its brand awareness.” Dora explained.
Public information shows that some Polkadot ecological projects invested by OKEx Blockdream Ventures have issued tokens on exchanges, with an opening price of up to 80 times the public offering price, which is evident in the market attention.
Exchange
The exchange is the largest traffic portal in the entire market. It is logical to follow up the Polkadot ecology. At present, most exchanges, including OKEx, have launched the Polkadot ecological zone, which is convenient for investors to deploy Polkadot ecological projects.
Source: OKEx official website
It is worth noting that in addition to regular currency listings, OKEx also launched lock-up mining products in DOT, KSM and other currencies to help investors obtain mining revenue at a low threshold. OKEx Blockdream Ventures, a subsidiary of the exchange, continues to explore and invest in high-quality projects in the Polkadot ecosystem.
Next, with the opening of the Polkadot ecological parachain auction, major centralized exchanges are expected to build token pledge entrances to connect the project parties and supporters participating in the auction.
Industry media, KOLs and communities
As a major event that can be foreseen in 2021, industry media, KOL and the currency community will also not be absent.
Let’s take a look at the industry media first. Live broadcasts, special topics, quotation reports… Almost available resources, major media are not stingy in reporting on Polkadot ecology, not only to aggregate resources, but also to compete for the right to speak, and become one of the biggest contributors to the parachain auction.
KOL is no exception. On Weibo, WeChat groups, and Moments, many KOLs in the currency circle are sharing various wealth passwords for Polkadot’s ecological platform, which has become a dazzling scene in the bull market.
It is the community that better reflects market sentiment. Since the beginning of the year, many private equity groups have suddenly emerged in the industry, which has given ordinary investors the opportunity to participate in the primary market of Polkadot ecological projects. However, it should be noted that the quality of projects currently raised in the community varies from good to bad, and the lock-up period ranges from 3 months to 3 years, and investors need to comprehensively evaluate the risks involved.
Off-site agency
Thanks to the strong trend of DOT in the past year, more and more over-the-counter institutions are also increasing their holdings of this investment target.
According to Bloomberg terminal data, on February 4, Goldman Sachs, ICAP, JPMorgan and UBS purchased the first exchange-traded product (ETP) to provide customers with access to DOT cryptocurrency Opportunities, but the share is still relatively limited.
According to Laurent Kssis, head of 21Shares ETP, Polkadot ETP currently manages more than $15 million in assets. The company also manages the “Basket of Cryptocurrency Index ETP”, which tracks the performance of five major cryptocurrencies. DOT is the second largest component of the index.
For over-the-counter institutions, the emergence of similar ETP products is expected to become a compliance exposure for investors to get involved in DOT investment, which is positive for the prosperity of the Polkadot ecosystem.
Concluding remarks
With the help of many institutions and investors, the Polkadot Parachain auction is about to begin.
On the surface, this is a competition for capital power, but in essence, the parachain auction is a great parade for the Polkadot ecology, testing the Polkadot team, the project team, and even more the Polkadot ecology. Supporters.
Just as Li Kunyun, the founder of DeLin Capital, said, Polkadot will enter the ecological maturity period after the card slot auction. This period is the most likely to be a leading project. “Because most of the projects in the early stage are just based on the projects of the Ethereum ecology, they are preconceived and dominate the market. Only when the real valuable needs in the Boka ecology mature will appear, and there will be high-value leading projects.”
From a long-term perspective, the landing of the parachain is only one of the key nodes of Polkadot’s macro vision. It remains to be seen whether Polkadot can truly build a blockchain network interconnected by all chains in the future.
