About a month ago, the Polkadot test network Kusama completed the first slot auction. This auction was regarded by the outside world as a preview and test of the Polkadot mainnet slot auction, which attracted many Polkadot and cross-chain technologies. The gaze of followers. So what are the noteworthy points of this Kusama slot auction, what are the development plans for the project after the auction, and how much room for imagination in the future?
On August 3, we invited Karura, the head slot winner of the Kusama auction, and YuZhu, a global community contributor of the Acala team, to the WebX lab online community to share and discuss the behind-the-scenes of the Kusama auction from the front-line perspective of the Polkadot ecological project side. As well as the future story, dig deep into the hidden opportunities of the Polkadot ecology in the "post-auction" era.
Here are the key questions and answers from the entire AMA:
Q1: First of all, congratulations to Karura of Acala Xianxing.com for winning the first slot auction in Kusama. Before we start, please say hello to everyone here.
YuZhu：
Hello, everyone, I am yuzhu, an open contributor of Acala & Karura, and currently mainly contribute to the domestic market of Acala & Karura, I am very glad to participate in the online AMA event held by WebX Labs to share with you the Acala & Karura.
Q2: Can you briefly introduce Aacala and Karura? Including the core business of the two as well as the relationship and positioning differences between the two. YuZhu:
Regarding this issue, the first thing I want to say is that Acala is Polkadot’s DeFi center, and Karura is Kusama’s DeFi center, which respectively bring a series of DeFi infrastructure functions to the Polkadot and Kusama ecosystems, such as decentralized stablecoins , DEX, derivatives that release Staking liquidity, etc. In addition, both Acala and Karura will launch Acala EVM to provide DeFi developers and projects with an open environment for smart contracts compatible with Ethereum while retaining the advantages of the Substrate framework.
Both Acala and Karura are developed by the Acala team. All product functions will be deployed first in Karura. Just like Kusama, it will test the security of the code and functional mechanisms in a real environment. Once the functions and codes are unstable, then This functionality and code will not be deployed on Acala. So from this point of view, Karura is a relatively innovative network, and its functions will appear on Karura, but not necessarily on Acala. Compared with Karura, Acala will be more stable and secure, with bank-level security.
Q3: We know that Karura got the head slot with a very big advantage, can you share with us some interesting discoveries during the auction? For example, details worthy of attention or some rules.
YuZhu:
In fact, for bidding slot projects, having an absolute advantage in the bidding random period is the safest way to win the auction. Because once the random period starts, even if the opponent has a leading block, there is a possibility of losing the auction. Take the last slot of the first round as an example, although Bifrost has 97% probability, Basilisk has 3%, and the candle extinguishing period is just an hour before Basilisk leads. So if the project wants to ensure that it can get the slot, it is better to make more efforts before the start of the random bidding period.
Q4: How do you view and evaluate this Kusama slot auction from the perspective of actual value and significance, rule design, and competition?
YuZhu:
I think the beginning of the slot auction allows everyone to see who is really "swimming naked". In other words, this actually filters out some "fake" Polkadot ecological projects for users. The project does not even bid for slots. Apart from chasing the popularity, perhaps the project itself has no long-term development plan.
Regarding the design of the rules, I think Polkadot still gives the project party a degree of freedom, such as the setting of the upper limit and the reward distribution mechanism. These are all determined by the project itself, and it also gives sufficient KSM unlocking time from the start of Crowdloan to the start of the auction. . Moreover, I personally think that the way of candle auction also prevents price attacks at the last moment to the greatest extent and improves the fairness of the auction.
Finally, in terms of competition, as I mentioned in the last question just now, each project has different advantages and characteristics. It is best to use the maximum energy before the start of the random bidding period, so the competition of each slot depends on the situation. Some of the competing projects themselves, but in any case, the slot auction still proves the value of KSM itself, so this is good for Kusama itself. I have mentioned many times before that Polkadot and Kusama’s architecture itself and Our own ecology is a mutual achievement. If the relay chain is good, the parachain is also good; if the parachain is good, the relay chain is even better.
Q5: What do you think is the reason why Karura was able to win the auction with a big advantage this time? What successful experiences can you share?
YuZhu:
I think it can be divided into three points:
The first point is technical ability, because since the end of 2017, most members of the Acala team have focused on Polkadot technology, and began to participate in testing during the Polkadot Hello world stage, so in terms of technical ability, we have always been developing with Polkadot Team Parity maintains communication. In addition to contributing code to Substrate and fixing bugs together, etc., we are basically the first to "hand in homework" for the launch of all new Polkadot features, so we have a certain amount of precipitation in terms of technical capabilities. It is also a key factor for the community to participate and support our auction with confidence.
The second point is our own community. Acala was born from the tail of the bear market in 2019. It had its first testnet in early 2020 and held the first candy festival. The rewards we gave out for the first candy festival were very generous. Friends who have passed Acala's first candy festival should know it.
The third point is to polish the product while continuing to cultivate the user community. Moreover, it has been more than a year since we started the first testnet and now the Karura Swap function is available. During this period, our testnet has successively launched 6 versions, and we have been continuously cultivating the community, doing User education, so I believe that many users who support Karura slot auctions made their decisions after fully understanding. Of course, user education is a long-term thing, and we will continue to work hard in this regard.
Q6: Can you comment on the value of this head slot for Acala and Karura? What does it feel like to get a head slot? YuZhu:
Because slots are the prerequisite for the launch of Acala & Karura, head slots are very important to us. You can also feel that since Karura took the slot on June 22, it has successively opened various landing DeFi functions, not only for the progress of the project itself, but also for the Kusama ecology. Positive landing application. As for how it feels, we still focus on the product itself. The most intuitive reflection is that our functions are finally available online.
Q7: In the projects participating in the Kusama slot auction, what is the main structure of the source of KSM? Which one accounts for the greater proportion of individual user participation or institutional organization participation?
YuZhu:
We have done a statistics before, you can see the following two pictures:
In terms of number of people, users with less than 50 KSM contributions accounted for about 93% of the total number (this does not include the proportion of users in CEX). So most of our KSM comes from our own community. Although the power of the organization is great, it also proves that the power of the community is still unnegligible in slot auctions.
Q8: Based on this Kusama slot auction, what experiences and lessons can be applied to the slot auction on the Polkadot mainnet? Is there a better way for users who want to participate?
YuZhu:
In fact, I think it is necessary to understand the principles and mechanisms of parachain slots before participating in slot auctions. Because of the parallel chain slot auction, for the project, it is essentially to borrow KSM from the community. After the slot lease period ends one year later, the KSM will be returned, and the project party will use its own Token to give users as The interest used by KSM this year, so whether to participate in a project’s parachain slot auction, you need to measure and compare the KSM Staking income in the next year and the value of the Token sent by the project party, if not from a year’s perspective Looking at slot auctions, if you only consider short-term benefits, it may not be a good choice to participate in slot auctions, but no matter what, before participating in anything, you must consider what you need before making a decision, because the right to decide is my own.
Q9: What is the average income level of users currently participating in the slot auction pledge?
YuZhu:
You can calculate by multiplying the number of Tokens by the project party by the price and then by multiplying the number of KSM by the price. Of course, this is floating. If you refer to the current price of KAR, it is better than KSM's Staking income. Moreover, KAR is a fixed total amount, and there is a possibility of deflation in the future, and KSM also has an inflation mechanism. As for the specific income level, you can calculate it yourself.
Q10: What is Karura's development strategy and general route after winning the auction? Based on the Toutiao and Kusama cross-chain network obtained now, what valuable products or services does Karura provide users? What is the current stage or focus of work? In terms of overall strategy, are Karura and Acala consistent or have certain differences?
YuZhu:
If you want to know about Karura's current status and future function opening plan, you can see this link:
https://www.notion.so/acala/dcabf9ba7c6246c69b913d5972503227?v=4121894373fd43d98ffcac260803928d
At present, Karura Swap is available. You can provide liquidity for the KAR/KSM trading pair, or you can directly exchange KAR and KSM on Swap. It is expected that kUSD can be lent out with KSM this week, depending on the block height in the chain proposal. Once kUSD can be lent out, liquidity incentives will be activated, and this will be available to everyone soon.
Of course, you have also seen that the next function we will open is LKSM and BTC and other off-chain asset bridges. I believe that with the continuous development of functions and the improvement of asset richness in the future, the TVL of the Karura network will reach another level. As for the focus of our work, it must be function deployment and product users. After the EVM function is enabled, we will also do some ecological expansion work. Finally, in terms of overall strategy, I believe that with Karura going through the front, Acala's rhythm will definitely be more stable.
Q11: What products or incentives do Acala and Karura recommend to users recently?
YuZhu:
At the product level, there is one thing that holders of off-chain assets such as BTC can pay attention to, because holding BTC alone only passively enjoys the deflationary benefits in the economic model. Once BTC and other off-chain assets on the Karura network are connected , Mortgage BTC to lend kUSD, and then use kUSD to exchange for LKSM (of course, there may be direct mortgage BTC to borrow KSM or LKSM in the future ecology), so that I can enjoy the staking income of KSM without losing BTC .
In addition, there is another product function - LKSM is what I want to recommend, because LKSM is a product that releases the liquidity of KSM Staking (in essence, LKSM is a transferable certificate on the chain that includes your KSM principal and Staking income), you will After you switch your KSM to LKSM, you can not only enjoy the benefits of KSM Staking, but the Karura network will also introduce a series of liquidity incentives related to LKSM, which greatly increases the playability of Kusama’s ecological DeFi and the value of KSM itself for users. Usability, so please pay attention to our next new progress
