This article is the second article provided by the Polkadot community volunteer organization (content group).
As we all know, the number of Polkadot’s parachain slots is limited. Therefore, if the project party wants to become Polkadot’s parachain, it must mortgage DOT and compete with other project parties for the right to use the slot. We call the parachain slot auction Make PLO.
The form of ICO in the past was to pay ETH or BTC to the project party in the form of a one-time purchase, but PLO is not. PLO is more like a "new way of raising funds", users provide their own DOT to participate in the pledge. It is just to help the project party to bid for parallel slots, but DOT is still its own. So what roles do Polkadot, users, and project parties play in it?
What does Polkadot get?
It should be noted that Polkadot is auctioned through slots,Lock DOT and reduce the liquidity of DOT. In this way, DOT's slot system can effectively control the market's selling pressure, and the sustainable stability of Lipoka's ecology.
From the perspective of Polkadot's ecological influence, by allowing users to participate in the slot auction, on the one hand, projects are initially screened in this form. Only projects with strong team or community funds and high quality can gain user support and win this auction.
Another aspect is to involve more people inside and outside the circle. Now many well-known media platforms can see that the keyword slot auction can be said to further enhance the popularity of Polkadot. Following this, better projects will enter the Polkadot ecosystem, which may also lead to an increase in the price of Polkadot, and more users will know Polkadot and understand Polkadot.
Back to the original intention of Polkadot ecology, cross-chain.The parachain slot auction is an important milestone in Polkadot's roadmap, which means that Polkadot's cross-chain vision has really begun to land.
Why users are motivated to participate in auctions
The most direct benefit of the user will be to participate in the pledge, and the income obtained during the pledge period. There does not seem to be any risk for users to return DOT after the staking period ends.
Users will also receive additional benefits, which is the community incentives of the project side. Already some projects have stated that they will allocate a certain percentage to reward supporters. For example, ChainX plans to use 15-20% of the council fund and the computing power of the entire network (which can dig out ChainX’s native token PCX) to motivate supporters.
In the long run, the Polkadot ecology now has strong technical competitiveness and rich developers, and Gavin Wood has a strong developer appeal, and users expect Polkadot's ecology. As far as the project is concerned, if the project is good, there will naturally be no shortage of support from users bidding for their slots; if the project is not good, no one will support it. Users are more convinced of the value of the project after it goes online, and value the investment value of the project.
What can the project get? where is the difficulty
Taking the slot itself in the early stage is a kind of publicity for the project, attracting more DOT holders to pay attention to these projects, which is conducive to the exposure of the project and more conducive to the later ecological construction. At the same time, as the head project of Polkadot, it has priority access to the main network and realizes cross-chain interoperability with other projects. With the development of Polkadot ecology, it will be more likely to become a top project.
In terms of technology, winning parallel card slots in the auction means that the official has more funds and technical bias. For example, when launching the main network of the project, you can take a photo of the card slot and go online simultaneously, which will also reduce the work of changing code development.
At the same time, the difficulty of bidding for card slots has also increased. At present, 10 projects have participated in the auction, and there may be more in the future, but the number of card slots is limited, and not all projects can be auctioned to get card slots. Moreover, the bidding card slots are only rented and not sold. The longest lease period is two years, including four cycles. Projects that intend to bid need to calculate the expected valuation of a single bidding cycle or multiple leasing cycles.
The card slot auction is obtained through a candle auction, which means that during the bidding process, the auction will end at a certain point in time, and the project party must pledge as much DOT as possible during the participation period to win the auction.
