First of all, based on the long-term research on Polkadot’s ecology by DL Capital, we must clearly point out that Polkadot did not realize the real effect before the parachain was officially linked to Polkadot or Kusama relay chain and cross-chain was realized. Of ecology.
Even if we see that there are currently approximately 400 projects in the Polkadot ecosystem, most of which are based on the Substrate framework, we can only think that this is a relatively loose “alliance” in order to achieve stability and Sufficient asset scale, where the ecological environment allows, a mature market environment is required to cooperate with the atmosphere and tacit understanding between developers to carry out resource flow and collaboration.
Now the Polkadot ecology may only need to wait for one thing to come. The narrative of Polkadot ecology is mainly based on the concept of “cross-chain”. Some developers, investors in the primary and secondary markets, communities, well-known exchanges, sub-applications of the Polkadot system, and other external worlds we have met are all right Polkadot’s ecological development is full of expectations. These are the absolute core forces surrounding Polkadot’s ecological construction, coupled with the structural foundation of Substrate, Gavin Wood’s own charisma blessing, and the financial support of the Web3 Foundation, making Polkadot stand out as a star project in the blockchain.
Although we cannot ignore the huge potential of Polkadot’s ecological follow-up, even with the above halo, we must take an objective attitude towards the development of Polkadot’s ecology. The high degree of freedom of business mergers brought about by cross-chain, the Substrate framework, and the tremendous power of developers in the Polkadot ecosystem are all key factors that create and support the Polkadot ecosystem to become the “new giant” in the market. According to Gavin Wood’s own public speeches or internal exchanges shared by the team, Polkadot’s cross-chain is not only the interaction of information and assets, but also the collaboration and free invocation of future smart contracts and business modules, which will bring more to Polkadot Funding and opportunities. The Substrate framework and shared security also greatly reduce the barriers and costs for developers to enter.
From mid-2020 to the present, the “parachain” projects in the Polkadot ecosystem and the projects that received the official Web3 grant have caused great repercussions in the community. Although the attention to this field has declined recently, it can be seen that , The basic components of the Polkadot ecology have become more mature. At the beginning, the capital side judged whether to participate in a project based on the strength of the technical team, the direction of the project being developed, and whether the official grant was obtained. Now everyone pays more attention to whether the project has the financial strength and actively participates in the parachain insertion. Slot auction. Everyone in the Polkadot ecosystem is waiting for the parachain slot auction in the first quarter of 2021. Recently, many Polkadot projects are also actively contacting DOT-holding institutions, large households, node merchants and some exchanges to seek Opportunities for cooperation in slot auctions. The real start-up part of the development project is heavily dependent on the initiation of cross-chain functions. Therefore, the next highest priority event of the Polkadot ecology must be the “parachain” slot auction. Although it has not yet arrived, it carries the same roles in the ecology. Expectations.
Another point can be more focus on Polkadot’s advanced version of Kusama. Most people may ignore this, because the progress of the Kusama network is usually earlier than the Polkadot main network. For example, Polkadot’s pledge time is 28 days. Kusama’s pledge time is 7 days, which means that projects can be iterated and deployed quickly, and new directions can be more freely tried for application testing, which is more suitable for most small and medium-sized teams.
More importantly, the auction of the “parachain” slot on Kusama is earlier than the auction of the “parachain” slot on the Polkadot mainnet, and the cost is lower. Therefore, there will be some projects that choose to abandon the auction of the Parachain slot of Polkadot’s main network and choose to participate in the cheaper Kusama “parachain” slot auction.
Uncertain auction
There will be a lot of uncertainty in the current “parachain” slot auction
The first is the uncertainty of time.
We used to think that this event should happen in the fourth quarter of this year or the first quarter of next year, but it seems that the official has not clearly given a specific time for the Polkadot mainnet “parachain” slot auction. Based on the continuous follow-up and in-depth understanding of the progress of the “Parallel” slot auction by Delink Capital, it is certain that all development work should have been completed, but the official has not disclosed when the remaining debugging and testing work can be completed.
The second is the uncertainty of competition.
In fact, only need to hold enough DOT, almost anyone can directly participate in the “parachain” slot auction competition. Therefore, in addition to the Substrate-based parachain project, there may be exchanges, communities, and mining pools. , Capital institutions, and even large individuals participate in the auction. This will increase the intensity of the auction competition for slots, and to a certain extent affect the results of the final slot auction. The participation of this part of the role greatly increases the results of the slot auction Uncertainty.
The third is the uncertainty of the “parachain” slot auction method
The candle auction method used in Polkadot’s “parachain” slot auction is different from the traditional auction method. You don’t know when the auction will end. Maybe the auction has ended while you are still bidding. The auction system will randomly select a time point to end, and then return to the final end time point to check the bidding candidates at that time, and finally determine the candidates who won the bid. Therefore, our DeLin Capital Institute hereby recommends that every wealthy and gentry participating in the “parachain” slot auction should submit as many “tenders” as possible to increase the chance of winning the bid in the final election. This will also increase the intensity of competition in the entire slot auction.
We can foresee that the Polkadot Parachain Slot auction will be a fierce battle, and the most fierce battlefield will be the “head-slot” competition. Since the lease period of each slot is two years, the auction takes every 6 months as a time period, and bidders can choose one or several adjacent periods. If you run into a very powerful auction competitor, and it packs the first year of the first card slot at one time, then the competitor will get priority access to the main network, debug cross-chain functions and compatibility, and verify cross-chain Priority of chain business. The Web3 Foundation and Polkadot officials may provide financial, media, or technical support packages to the top bidders.
More importantly, the super value of the blockchain industry media information and public relations and brand “head slot”, whether it is to “get the head slot” or “become a strong competitor of the head slot”, this information will make the role participating in the auction in the wave Part of the commercial value and huge influence in the card ecology. Therefore, no matter who “tops” in the end, they can use this to attract potential ecological investment users in the future or obtain business development capital through other channels. So many participants will publicly announce their slot campaign plans. But in fact, Polkadot has not yet received the official Parachain slot auction plan, which also makes the time node very uncertain.
Originality of auction design
The right to use Polkadot Parachain slot auctions is not permanent, but a 6-month lease period. Because the participants in the auction can choose a time period or multiple adjacent lease periods, there will be many different auctions. The combination method can ensure the fair competition of the parachain slot auction, because the longer the lease of the slot, the higher the cost of the bidder. There is only one slot in each period.
We estimate that the cost of the first “head slot” auction should be between US$1 million and US$1.3 million. Currently, only a few powerful projects can independently participate in bidding. In addition, Polkadot officially allows projects to raise bidding funds through IPOs. . Ordinary investors can directly transfer the DOT in their hands to the relay chain account and select the projects to be supported. After the slot lease expires, the DOT will be returned the same way.
The auction will profoundly change the flow structure of Polkadot’s existing ecological assets. In a sense, the parachain slot auction is a mechanism for screening high-quality projects. Only when the team or community has strong funds, high-quality projects can be supported and win this “award.” For the project party, they only need to do a good job and guarantee the quality of their projects, instead of preparing a large number of DOTs themselves, which actually reduces the burden of the project.
It is worth noting that if certain Polkadot projects in the ecological field or other role institutions are unsuccessful in the slot auction, the DOT participating in the bid will be released, and the large amount of funds generated in a short period of time may generate the price of the DOT secondary market Certain influence.
As an investment institution, we look forward to next year’s Parachain slot auction, and we look forward to accompany the growth of the project on the path of Polkadot’s ecological development, participate in the incubation or invest in more high-quality Polkadot star projects, let us work together to build Polkadot Eco it!
