Slot auctions are ready to go, get a look at the full picture of Polkadot slot auctions!

Polkadot is a well-known public chain in the industry with a very high reputation. The Polkadot mainnet was officially launched at the end of May this year, and it has not yet been fully “available”.

The most important node of Polkadot is the parachain. Only after the parachain is online, the Polkadot network can run applications. The current Polkadot network can only perform some basic functions such as staking, block generation, and transfer. So the launch of the parachain is very important to Polkadot.

At present, many projects of Polkadot Ecosystem have completed code development and auditing, and they can be launched directly after the parachain is online. Investors are even looking forward to bringing a big wave to DOT/KSM during the slot auction. .

Judging from the current news, the Rococo v1 testnet will be launched in the early Christmas period, and then the official launch of Rococo v1 means that the slot auction has officially opened. This article will use concise language to outline the whole picture of Polkadot Slot Auction for you, and help you understand the important event of Polkadot Slot Auction.

1. What is Polkadot?

Polkadot was founded by Gavin Wood, the former CTO of Ethereum, and is committed to becoming a cross-chain network of Web 3.0 infrastructure.

The reason for Polkadot is to solve the low performance problem of Ethereum, using the relay chain and parachain expansion scheme. In the Polkadot network, all blocks submitted by the parachain are verified by the relay chain nodes, and the relay chain is responsible for the final certainty of the parachain. The following picture shows the core concept of Polkadot:

The relay chain is responsible for finality so that all parachains have the same security as the main network. Parachain saves a lot of security costs, and can freely design different structures to meet its own business needs.

2. Why are slots important?

Due to the limitation of network resources, it is not possible to access the parachain without restriction. Polkadot has designed 100 slots for the parachain to use, and the method of obtaining it is auction. Only by acquiring the slot can you stably access the Polkadot network and enjoy the security of the main network. The essence of the slot is the right to use the Polkadot network. The slot is issued for 6 months, and one auction can get up to 2 years of use.

Each chain can design its own structure according to needs, and at the same time can enjoy the same security of Polkadot mainnet. Many parachains have been designed as smart contract platforms to attract project parties who do not want to bid on their own parachains to build applications on their own chains, thus forming their own small ecology within the Polkadot ecosystem. At this level, the importance of slots is even more prominent. Because the slot may allow the parachain to form its own ecology and realize its own network effect.

Since many projects have been fully prepared and are in urgent need of slots, and the items that are auctioned to the slots first will have a huge advertising effect, the first slot may be sold at a sky-high price.

Third, the steps of the slot auction

Gavin Wood mentioned in early December that the Polkadot Parachain will be launched in 6 steps. as follows:

• Launch Rococo v1 and wait for its stable operation;
• Online Kusama’s system (public interest nature) parachain;
• Open the auction on Kusama;
• Parachain that successfully bid on Kusama was launched;
• (After the audit is completed) the public interest parachain of Polkadot will be launched;
• Open the auction on Polkadot; launch the successful parachain on Polkadot.

The Kusama mentioned above is Polkadot’s pioneering network, which has an independent organization and community, and is an independent blockchain with real value. Kusama is Polkadot’s leading network, and all new functions and features that appear on Polkadot will be launched on Kusama first, and the same is true for slot auctions. Because the slot auction will be conducted on Kusama first, it is expected that Kusama’s secondary market will perform well under the blessing.

At the press conference of the Polkadot Parachain Testnet Rococo V1 on November 17, the official information revealed that Rococo V1 is expected to be launched on the testnet on Christmas Eve.

At Polkadot’s official Decoded conference, Parity core development engineer and Polkadot co-founder Robert Habermeier revealed:

Parachain is expected to release the Parachain testnet in January 2021, and it is expected to achieve “product-level delivery” in February 2021.

The Parachain testnet released in January mentioned here is the first phase of the six stages mentioned by Gavin Wood, the launch of Rococo V1.

From the roadmap mentioned by Gavin Wood above, the first stage of the parachain is “to launch Rococo v1 and wait for it to run stably”, and the current progress is that the Rococo v1 testnet will be launched on Christmas Eve, and after the testnet is Rococo v1 is officially launched. The launch of Rococo v1 means that the Polkadot slot auction has officially opened. This time node may be in February.

4. Will slots be too expensive to affect ecological development?

Since the early slot will bring a huge advertising effect, it may be very expensive.

Slots are not available for bidding at any time, but are released at a rhythm of a few weeks. As the number of releases increases in the later stage, the price of the slot will be reduced compared to the previous stage. At the same time, the price of the slot is closely related to the development of the Polkadot network. If the Polkadot network develops hotly, the slot may continue to maintain a high level.

But not all projects want to spend a lot of money to bid for slots, what about these projects?

In fact, for some non-financial businesses, it may not be very suitable to bid for slots on Polkadot’s main network. The relatively cheap Kusama network may be a better choice.

Secondly, if it is a business that does not require frequent interaction, using parachain threads will be a more cost-effective choice. Parachain threads can also be connected to the Polkadot main network, but unlike the parachain, it has a fixed position. The payment model is on-demand. When there is business, it is necessary to link the main network and pay for it.

There are also some project parties who only want to make applications and don’t want to be chains, they can choose to build a parachain that has been connected to the Polkadot main network. Judging from the current news, many parachain projects have been designed into a platform model. The applications that come to build are very welcome. This will help the parachain to form its own ecology and increase the coverage of users. Why not?

So if you think that the slot cost is too high, in fact, there are many flexible ways. Developers can choose the way that suits them to access the Polkadot network to obtain the security of the Polkadot main network and the user ecology.

5. What are the risks and opportunities of slot auctions?

Slots are expensive, and it is difficult for the project party to bid on its own. Polkadot officially designed a special bidding system so that other users can help the project team bid together.

In order to achieve the auction purpose, many project parties have put out their own tokens to encourage community users to participate in the auction. The DOT/KSM that users participate in the auction will be locked for 6-24 months, and the project party will generally design different incentive shares for different lock-up periods.

Users participating in the auction are mainly faced with opportunity risks. Users who do not participate in the auction can obtain the system’s staking income and other investment opportunities. And if the development of the participating project is not good, the token rewards they get may not be as much as the benefits of Staking.

However, if the project develops well, the benefits may be considerable. For most new projects, there is room for imagination here.

6. Who are the important players?

In the slot auction, in addition to the project party and its community, exchanges, institutions, and Polkadot officials will also be very important participants. After all, the coins in the hands of retail investors are only a small number, and they will not all be used to participate in the auction. Then who can obtain the official support of institutions, exchanges, or even the official, may have an important impact on the auction.

At present, many projects have indicated that they want to participate in the slot auction, such as Acala, Chainx, Bifrost, Darwinia, Stafi, Phala, SORA, etc. In fact, these are also projects that are often named by the official public channels. The official card is closer.

At present, from the public channels, these projects have more or less announced some incentive plans, but due to competition needs, at this time node, no detailed plans have been announced.

Let’s take a brief look at the incentive schemes provided by the above projects to see if they can attract you.

Acala

Acala is currently a well-known project in the Polkadot ecosystem. It wants to become the core of Polkadot’s DeFi, which mainly includes stable currency issuance, DEX, and DOT/KSM liquidity release services. The Acala team is strong, the investors are exceptionally luxurious, and the community building is also very good.

At present, Acala has not given a specific incentive plan. From the public information, Acala wants to become the first parachain on Polkadot and Kusama. Acala will build an Acala pioneer network on Kusama. For Kusama, the bidding incentive will come from the corresponding chain. At present, Acala has not announced the percentage of tokens used for incentives, but community users are actively preparing to participate.

Chainx

ChainX is the earliest Substrate chain in China, and the mainnet went online very early. ChainX wants to become a cross-chain hub for digital assets, and has been doing cross-chain business of digital assets.

According to public information, ChainX plans to use 15-20% of parliamentary funds and the entire network’s computing power (which can mine ChainX’s native token PCX) to motivate supporters.

ChaiX’s token distribution model is computing power mining, which can be obtained by locking the assets required by the network. At present, 15%-20% of computing power is not small. However, considering the substantial growth of business after connecting to the Polkadot network, computing power may continue to increase, and whether computing power is attractive requires further judgment.

Darwinia

Darwinia is similar to ChainX, and it is also the main cross-chain project. However, Darwinia’s cross-chain direction covers a wider range. It includes not only the cross-chain of assets such as ETH, which we often say, but also the cross-chain of game assets and non-standard assets. Application chain cross-chain and other services.

According to public information, in addition to providing token incentives, Darwinia will also provide land rewards in its game “Evolution Planet”. No more auction details have been released.

Bifrost

Bifrost is a DeFi protocol that focuses on the liquidity release business of pledged assets. Bifrost has already launched the liquidity release business of ETH 2.0 Staking, and it will also provide liquidity release business for slot auctions. Users who use Bifrost’s services will not only receive bidding rewards, but also obtain liquidity, which will increase users’ enthusiasm for participating in bidding.

According to public information, Bifrost reserves a total of 13.5% of tokens for slot auctions, which will be used to bid for the right to use the parachain for 4 years. Specifically, a total of 2.25% of the tokens are used for the Kusama Parachain slot auction, and the remaining 11.25% of the tokens are used for the Polkadot Parachain slot auction.

Stafi

Stafi’s business is similar to Bifrost. It has already launched the main network and released a cross-chain bridge for the Ethereum network. It also recently released an ETH 2.0 staking liquidity solution, but it has not yet been launched.

Stafi has not announced the bidding rules, but according to public information, Stafi reserves 40% of the tokens in the community incentive part, which has a lot of room for operation.

Phala

Phala is the privacy infrastructure on Polkadot, and is currently a well-known player on the Polkadot ecological privacy track.

Phala date has announced some plans. Phala will use 0.5%-1% of the total tokens for the Kusama parachain slot auction, and 3%-5% of the total tokens for the Polkadot parachain insertion Slot auctions participate in the auction.

SORA

SORA is a chain based on Polkadot, and Polkaswap is a DEX built on SORA. Although SORA is not well-known in China, it is a project worthy of attention.

The SORA team is strong, and the developed Polkaswap is also unique in design. SORA will participate in the auction of parachain slots, and the incentive it will provide is 30% of the total amount of Polkaswap tokens. It plans to bid for the right to use the parachain for 6 years.

Seven, summary

This article tries to use concise language to outline the whole picture of Polkadot Parachain auction for you. The above is the key content of Polkadot Parachain slot auction.

In slot auctions, the liquidity release service provided by Acala and Bifrost is a highlight in the fierce battle, and will provide additional help to users participating in the auction and encourage more users to participate in the auction.

Judging from the current progress, the product-level delivery achieved in February may be the launch of the public welfare parachain. As for the interval between the public welfare parachain and the auction, it is still uncertain, but it will not be a long wait.

Parachain auctions have already gained momentum, and we will wait and see what kind of waves will usher in.

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