Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc)Editor's Note: This article comes from
Vernacular Blockchain (ID: hellobtc)
Vernacular Blockchain (ID: hellobtc)
Recently, the auction of Polkadot/KSM parachain slots has become more and more popular: there are more people discussing in the community, and those project parties in the Polkadot ecosystem who have been low-key before have come out to promote activities. Large trading platforms have also begun to compete for layout, launching various DOT lock-in financial management, and some even launched special funds of several million dollars to specifically support Polkadot ecological projects.
Some people say that the parachain slot auction contains huge opportunities for wealth, and some people say that this is just a "reprint" of the EOS super node election that year, with little thunder but little rain.
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When it comes to Polkadot, many people immediately think of "cross-chain". According to the official introduction, Polkadot's goal is "a high-performance, scalable heterogeneous multi-chain blockchain". So, how does Polkadot achieve this goal?
What is Polkadot and what is KSM?
When it comes to Polkadot, many people immediately think of "cross-chain". According to the official introduction, Polkadot's goal is "a high-performance, scalable heterogeneous multi-chain blockchain". So, how does Polkadot achieve this goal?
Therefore, we can see that the entire Polkadot network system consists of relay chains, parachains, and transfer bridges. The relay chain plays the role of the "federal government", and each parachain is equivalent to a "state". The transfer bridge is essentially a special parachain, but its responsibilities include linking other blockchains with different structures.
First of all, before Polkadot, Parity Technologies, founded by Gavin Wood, launched Substrate, a scalable, modular, and general-purpose blockchain framework. Substrate integrates commonly used functions such as peer-to-peer network, consensus algorithm, common encryption algorithm, data storage, transaction management, etc., allowing developers to realize "one-click release chain". With Substrate, developers don’t need to “reinvent the wheel” and can focus more on the development of business logic, and don’t need to wait for Polkadot’s development progress, because the Polkadot relay chain is also developed and built based on Substrate.
Those blockchains developed and built through Substrate have a similar structure to the Polkadot relay chain and belong to the "isomorphic blockchain". In the future, they can directly become Polkadot's parallel chains and directly interact with the Polkadot relay chain. There are also some blockchains, such as the Bitcoin blockchain, the Ethereum blockchain, and the EOS blockchain. Their consensus algorithms and mechanism models are quite different from Polkadot's structure, and they belong to "heterogeneous blockchains." Heterogeneous blockchains need to pass through a "transfer bridge" to interact with the Polkadot relay chain.
5. After the audit is completed, launch Polkadot's public interest parachain;
1. Launch Rococo v1 (test network) and wait for its stable operation;
2. Launch Kusama's system (public interest nature) parachain;
3. Open the auction on Kusama;
4. Launch the parachains that successfully bid on Kusama;
5. After the audit is completed, launch Polkadot's public interest parachain;
6. Open the auction on Polkadot;
7. Launch the parachains that were successfully auctioned on Polkadot.
6. Open the auction on Polkadot;
7. Launch the parachains that were successfully auctioned on Polkadot.
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What is Parachain Slot Auction?
In the above, we compared Polkadot's relay chain to the "federal government" and parachains to "states". The parachain slot auction is to allow each "state" to join the "federal government".
Whether it is a homogeneous blockchain based on Substrate or a heterogeneous blockchain such as Bitcoin, Ethereum, and EOS, they are all independent blockchains and "islands". After taking the parachain slots and becoming Polkadot’s parachains, these chains can interact with the Polkadot relay chain directly or through a transfer bridge, as well as interact with other parachains connected to Polkadot, thereby generating More superimposed services, improve its own scalability, and at the same time enjoy the security provided by the relay chain.
The parachain slot auction, more accurately, should be the parachain slot lease auction. The parachain slots are actually only rented and not sold. The lease period of each parachain slot on Polkadot is 6 months, and four lease periods can be bid at the auction, which means that the project can bid for one or more The lease period, the lease period of parachain slots on KSM will be shorter.
It should be noted that the pledged DOT/KSM is still in the hands of the user, but the liquidity is lost, and the project party cannot misappropriate the DOT/KSM pledged by the user without permission. This is similar to EOS node voting. Users can exercise voting rights after staking EOS and vote for supporting nodes. The pledged EOS only loses its liquidity, but it is still in the hands of users.
When the project party bids for the auction, due to cost considerations, it is impossible for the project party to purchase all DOT/KSM in the secondary market and then pledge it to itself. Instead, it will introduce relevant incentive mechanisms, such as token rewards for the project, to motivate other Users pledge DOT/KSM to themselves. After the user pledges to the project party, the pledged DOT/KSM will be locked. If the project party takes the parachain slot, it needs to wait until the slot lease period expires to unlock it. If the project party does not take the slot, the auction Unlock and release when finished.
It should be noted that the pledged DOT/KSM is still in the hands of the user, but the liquidity is lost, and the project party cannot misappropriate the DOT/KSM pledged by the user without permission. This is similar to EOS node voting. Users can exercise voting rights after staking EOS and vote for supporting nodes. The pledged EOS only loses its liquidity, but it is still in the hands of users.
In addition to parachain slots, the Polkadot system has also introduced parathreads. To put it simply, parathreads can be understood as "shared parachains", which support multiple projects to share some specific parachain slots in units of blocks. Therefore, Parallel Thread is specially designed by Polkadot for those projects that cannot afford the slot auction fee, or whose business model does not require long-term rental slots.
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1.Acala
According to statistics from the PolkaProject website, although Polkadot’s mainnet has only been online for a few months, the number of projects based on Polkadot/Substrate has reached 308. Of course, not all projects will bid for parachain slots, but it is foreseeable that the competition for slot auctions will be fierce.
existBelow, just a few representative projects that have publicly announced that they will participate in the parachain slot auction.Acala is an important DeFi infrastructure in the Polkadot ecosystem, providing Ethereum-compatible support for DeFi projects in the Polkadot ecosystem. In addition, Acala also has: decentralized over-collateralized lending, similar to Maker on Ethereum; decentralized asset swap, similar to Uniswap on Ethereum; providing liquidity for pledged DOT/KSM through derivatives ; Decentralized Autonomous Fund DAO.
2.Bifrost
exist
The previous issue of "Big Talking in Vernacular"
3.ChainX
Among them, Fuyao, a member of the Acala council, revealed that when the first slot auction, Acala will take out a large part of the amount (8-10%) to motivate users who participate in the pledge.
vToken can optimize transactions in multiple scenarios such as DeFi, DApp, DEX, CEX, etc. Through vToken, the transfer channel of pledged rights and interests such as Staking and PLO can be realized, and the risk hedging of pledged assets can be realized. Expanding scenarios such as when vToken is used as collateral for lending, its Staking income Part of the interest can be offset to achieve low-interest borrowing.
4.Crust
Crust provides a decentralized storage network for the Web3 ecosystem, supports multiple storage layer protocols including IPFS, and provides an interface to the application layer. Crust's technology stack can also support a decentralized computing layer. Crust aims to build a distributed cloud ecosystem that values data privacy and ownership.
ChainX is an asset cross-chain project in the Polkadot ecosystem. It cross-chains external assets such as mainstream BTC into the Polkadot ecosystem and incubates subsequent derivative financial services. According to the introduction on the official website, the goal of ChainX is to become the asset cross-chain gateway of the Polkadot ecosystem.
ChainX Chief Operating Officer Kristen revealed that ChainX plans to use 15-20% of the parliamentary fund and the entire network computing power (which can dig out ChainX native tokens) to motivate supporters.
Crust provides a decentralized storage network for the Web3 ecosystem, supports multiple storage layer protocols including IPFS, and provides an interface to the application layer. Crust's technology stack can also support a decentralized computing layer. Crust aims to build a distributed cloud ecosystem that values data privacy and ownership.
6.Phala
Crust will use about 40% of ecological development for Polkadot slot auctions and related expenses, and develop a complete parachain auction plan before the auction.
5. Darwinia (Darwin Network)
7.Plasma
Darwinia is a cross-chain bridging network developed based on Substrate. In addition to conventional ETH and other asset cross-chain, it also includes cross-chain of game assets and non-standard assets, application chain cross-chain and other businesses. At present, Darwinia's main network has been launched, and it also promises to reward supporters with main network tokens.
According to Phala Twitter information, Phala Network has merged into Rococo V1 code, and plans to become the first parachain of Kusama and Polkadot. They plan to allocate 5 to 10 million mainnet tokens in the KSM parachain slot auction, and 30 to 50 million mainnet tokens in the Polkadot parachain slot auction.
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As we mentioned above, due to cost considerations, the project party will introduce some incentives, such as rewarding the native tokens of the project, to encourage users to pledge DOT/KSM to them.
Although these pledged DOT/KSM are still in the hands of users, they will lose liquidity. If the currency price plummets, the DOT/KSM in the pledge cannot be sold in time to stop the loss. This is the first potential risk we need to consider before participating in the pledge.
As we mentioned above, due to cost considerations, the project party will introduce some incentives, such as rewarding the native tokens of the project, to encourage users to pledge DOT/KSM to them.
After talking about the potential risks, let's talk about the benefits.
After talking about the potential risks, let's talk about the benefits.
Pledge DOT/KSM to the project party, and the definite income is the incentive given by the project party, most of which are the original tokens of the project. If the follow-up projects develop well and continue to grow stronger and bigger, the value of these tokens will also increase. Therefore, when staking, be sure to choose excellent and down-to-earth projects.
Secondly, with the auction of parachain slots, the number of DOT/KSM that can be circulated on the entire network will decrease. The reduction in circulation reduces the resistance to price increases. Of course, the price is affected by many factors, not just the circulation.
Pledge DOT/KSM to the project party, and the definite income is the incentive given by the project party, most of which are the original tokens of the project. If the follow-up projects develop well and continue to grow stronger and bigger, the value of these tokens will also increase. Therefore, when staking, be sure to choose excellent and down-to-earth projects.
Secondly, with the auction of parachain slots, the number of DOT/KSM that can be circulated on the entire network will decrease. The reduction in circulation reduces the resistance to price increases. Of course, the price is affected by many factors, not just the circulation.
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How can ordinary users participate?
If you are a novice user, it is recommended to participate directly through node service providers or trading platforms, and they will help you pledge. The advantage of this method is that the threshold is low, simple and convenient, but it is necessary to guard against the possible risk of running away. Therefore, when choosing a platform, you must choose a node service provider or trading platform with a good reputation and strong strength.
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Either way, the premise of participation must be knowing and evaluating the potential risks and benefits, rather than following the crowd.
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