At 7:00 pm on June 10th, Beijing time, the "DeFi New Paradigm - Bifrost Kusama Parachain Auction Conference" co-organized by Bifrost and Odaily was successfully held (Replay Portal). In the speech session entitled "Kusama slot auction competition, comparison of bidding advantages between parachains", Cao Yin, managing director of the Digital Renaissance Foundation, said that to participate in parachain slot auctions, first of all, one must participate with an investment mentality Parachain auctions cannot use secondary market strategies. Second, it depends on the token economic model of the project. Third, it depends on whether the team can persist in doing it for a long time. Fourth, it depends on whether the project ecology can be implemented. Finally, participating in the card slot auction depends on the bidding strategy of the project.
As a value investor in the Polkadot ecosystem, Cao Yin compared the advantages of the parachain slot auction projects in detail, and discussed in detail important issues such as "how to choose a parachain slot auction" and "how to participate in a parachain slot auction". Odaily compiled the entire content of Cao Yin's speech, and you are welcome to read it below.
How to choose the parachain card slot auction?
At present, there are many projects participating in the auction of parachain slots. There are six or seven projects that have relatively complete parachain auction plans. In the future, more projects will propose their own parachain auction plans. Afterwards, there will be an auction of DOT parachain card slots, and the auction policy will be different at that time. The parachain auction is a wealth feast, and you can get a lot of wealth accumulation, but in the face of so many options, how to effectively plan your investment? Who should you vote your DOT for, and how can you maximize your profits? Next, I will talk about my own investment strategy.
First, you must participate in the parachain card slot auction with an investment mentality, and you cannot use the strategy of the secondary market. The strategy of the secondary market is to buy today and sell in the market the next day. Parachain projects do not have such good liquidity. Some projects require a long-term lock-up. After participating, it is equivalent to investing in the primary market. This kind of investment will not remove your Kusama or DOT, but will be exchanged for parachain project tokens. This is a cost-free investment, but at the expense of your opportunity cost. Therefore, first of all, it is necessary to participate in the parachain auction with an investment mentality. The most important thing is to look at the fundamentals of the business and see whether the things made by this parachain are meaningful. This is very important. Because you have to follow this project for a long time, it depends on the cycle of this project, so only beneficial projects can reflect the long-term value. meaningful items.
Second, look at the project's token economy model (Token Economy). Because you participate in the parachain project, what you get in the end is the original token of the project. Can this token capture value? This is very important. Of course, based on the token economic model, if the business is good, the Token Economy of the token will also be good, but it does not mean that the Token Economy of all business projects will be good.
Third, look at the team. The project business has a vision, but the key behind it is whether the team can persist in doing this for a long time.
Fourth, look at ecology. Most Polkadot parachain projects depend on whether the ecology can cooperate with each other on assets, whether DOT mortgages can be realized between projects, or used in the agreement in various ways. According to this standard, decide which ones to choose among a dozen or even dozens of parachain projects.
Fifth, look at the auction policy. Now the bidding policies of various projects are being released one after another. After our research, we found that they are quite different, including how many tokens are allocated to bidders, and what is the proportion of the total amount of bidding tokens to the entire auction, including tokens How the coins are distributed. The goal of the Kusama parachain is 1.5 million. To achieve this goal, if the new Kusama is not accepted, everyone can obtain project tokens relatively fairly. There is no difference between good and bad, it depends on the fundamentals. There is also liquidity. Whether the project will be unlocked as soon as it goes online, or will it be unlocked linearly, or will it be unlocked all at once until the end? These project designs have all, and we have to look at it dialectically. When the market is good, one-time unlocking is definitely good, and it can be cashed out quickly. But when the market is poor or the market is uncertain, I personally suggest that you choose some projects with relatively scarce liquidity. The advantage of this kind of project is that when the market is relatively poor, there will be no stampede incidents and can be released in an orderly manner. , There may be 48 weeks or 36 weeks, the cycle is relatively long, the market can release the outflow of parachain auctions, and ensure that the market token supply and demand structure is relatively good. Therefore, in the end, whether to choose a high-liquidity token unlocking mechanism or a low-liquidity one needs to fully consider the market situation. Of course, the Bifrost protocol provides another solution for everyone. Tokens obtained through bidding and packaging of project rights and interests can be directly flowed, but the underlying assets of this token are subject to change, and the price of tokens packaged in other parachain projects will change. This method unlocks the liquidity of projects. These projects can be traded and sold in the market in the early stage, providing more choices for everyone. It is better to have choices than no choices. Like the reward policy of Bifrost, it is a triple reward, which will be introduced in detail later.
How to choose the right way to participate
First of all, you must clarify the auction goal. After participating in the auction, whether to throw it away immediately after unlocking; or as a value investor, use the primary market investment method to participate in the market auction, so you must be very clear about your participation role, if you are like me , I am very optimistic about the Polkadot ecology, and I am very optimistic about these Polkadot native projects, that is, value investment, and you can choose projects with long lock-up time and better fundamentals. Otherwise, according to the market, choose a project with relatively good liquidity in the early stage. After the auction, you can directly get the unlocking token, sell it, and recover the cost. There is no right or wrong, just determine your own goals.
Second, balance the configuration. After determining the goal, you have to consider how much KSM and DOT tokens to cash out when the market is relatively good. Very few people will sell all KSM, and very few people will stake all KSM. Most people are 28 Or sell or staking in the way of June 4th, it is very important to determine the target, and configure based on the target. Then, carefully study the fundamentals and bidding policies of each project. The third point is to unlock Kusama in advance. If you participate in governance, there is still extra time. The fourth point is to make a timetable, prepare various things, and participate in the parachain auction. Parachain auctions have a window period, like Bifrost, which has an "appointment period" of about half a month, and those who make an appointment can get a discount, with an additional 5% reward.
Bidding strategies for different projects
The first is today's organizer Bifrost's strategy, which has triple rewards. In the Bifrost Kusama slot auction, the SALP protocol will be launched for the first time to provide the casting of vsKSM. The KSM that participates in the vsKSM casting will be used for the Bifrost Kusama parallel chain slot auction. Users who support Bifrost to obtain the parachain will get vsKSM that releases liquidity Bidding rewards with BNC slots, for every 1 KSM supported, at least 10 BNC rewards will be obtained. The first two rewards are vsKSM minting income and slot auction income. Participate in the auction of Bifrost card slots, you can get a reservation code, if your friends participate in the auction through you, you can get an extra 5% reward, this is the third reward.
Shiden Network is Plasm's canary network. Shiden uses 22% of the total supply to bid for slots of 0-7 cycles. You need to lock 11 months of KSM tokens to support Shiden as a parachain. The KSM tokens backing Shiden will be locked for one month and released linearly over the next ten months. Token holders can stake SDN and earn Staking rewards.
Khala is the pre-mainnet deployed by Phala on the Kusama network. Khala Network will not issue new tokens independent of PHA. Khala will use K-PHA as a network pass, and K-PHA can be exchanged 1:1 with ERC20-PHA and main network PHA. Khala will participate in the Kusama parallel chain slot auction from the second slot, and auction slots for 8 time periods. For KSM that supports Khala's participation in the auction, a fixed ratio of PHA:KSM=100:1 will be rewarded. The upper limit of the PHA reward pool is 15 million PHA. After Khala reaches the support of 150,000 KSM, no rewards will be given to supporters.
Moonriver is the pioneer network of Moonbeam. This is the EVM chain on Polkadot. It was moved and deployed directly. 30% of the tokens will be directly distributed at the time of issuance, and the other 70% will be given to foundations, early investors, etc. . 30% of the 30% of the tokens will be distributed once after issuance. In other words, almost 9% of the tokens are released after the parallel chain goes online, and 21% of the total tokens are released linearly in 48 weeks. If there are more people participating in Kusama, each person will be allocated fewer tokens. If there is less participation, everyone will get a little more MOVR tokens.
Zenlink is rather special. It does not do parachain slots, but is actually a module that can interact. Therefore, Zenlink cannot be called a parachain, but a parachain project. It is designed to help other parachain projects obtain parachain slot auctions. Users deposit money in it and configure parachain slots according to different project reward policies. Auction tokens to obtain income. At the same time, it is very similar to Bifrost. You mortgage the coins, and you can also directly get part of the rewards of CRK.
