The Daily Hodl
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
The Daily Hodl
No Result
View All Result

How Will the Deployment of Polkadot and Kusama Auctions Affect the Blockchain Market?

by Alina Aseeva
June 5, 2021
in HodlX
HodlX Guest Post  Submit Your Post
 

Gavin Wood, founder of Kusama and Polkadot, has announced the launch of parachain slot auctions.

So, what should the crypto market expect from the upcoming auctions, and how will the introduction of this technology affect the existing balance of power?

What is Polkadot and how does it differ from Kusama?

Polkadot is a project that realizes interoperability between different blockchains. The mainnet was launched in May of 2020 but the final stage of the launch is approaching now.

While Kusama is great for bold experimentation and early-stage deployment, Polkadot is more conservative.

Governance on both Polkadot and Kusama is designed to be decentralized and permissionless, giving a say in how the network runs to everyone who owns the native token (DOT for Polkadot, KSM for Kusama).

What is the parachain auction and how will its launch happen?

There are many projects that intend to build on Polkadot and Kusama, and each will need their own parachain slot. The individual blockchains that connect to Polkadot are called ‘parachains.’ Not all blockchains can be connected freely, and you have to get a ‘slot’ at an auction.

During an auction, DOT or KSM holders can link their cryptocurrency to support a project they believe should receive a parachain slot. Teams can be sure of winning the auctions by convincing a large pool of KSM holders to lend their tokens for the fixed lock-up period.

The path of launching a parachain on Kusama differs from team to team, but in most cases it will happen as follows.

  • A participant designs a parachain and builds it using Substrate.
  • The participant tests and optimizes it locally, and then repeats these procedures on a testnet like Rococo.
  • A participant determines a slot lease auction strategy.
  • The participant joins an auction and bids away.
  • A participant deploys on the acquired slot after the start of the lease period.
  • At the end of the slot lease period, the participant renews it by joining another auction.

What happens next?

  • Teams bid by specifying at least one contiguous range of one and eight lease periods (each lease period is six weeks) and the amount of KSM tokens they are willing to lock up for the duration of the chosen period.
  • Open bidding continues for the duration of the auction. Teams can see other bids and increase their bid over time to stay competitive throughout the auction.
  • At the end of the auction, the precise moment of the auction’s closure is randomly determined by a verifiable random function (VRF).
  • The winning parachain is automatically onboarded at the start of the lease. The KSM amount that was bid remains locked for the duration of the lease, after which it can be unlocked.
  • Teams can extend their lease by winning another auction before the end of their current slot lease period.

How pricey is the participation?

Now everybody can meet the minimum amount of DOTs for staking, so the entire PoS network benefits from higher security.

This has two consequences.

  • You no longer need to stake DOT on an exchange (like Kraken) to earn rewards if you’re not extremely rich. So the CEXs will lose their share of revenue and it will go back to the community.
  • With more active nodes running 24/7, the risk of an attack on Polkadot becomes significantly lower, which is a good sign for the upcoming parachain launches and also may result in the DOT price going up.

Under what conditions will the auction take place?

Wood cites two conditions to launch the parachain feature on the main Polkadot. One is to “finish all audits by external organizations.” The audit has already begun and will be completed in the near future, he said. The other is “to run new features on Kusama.”

How will the further deployment of parachain affect the blockchain market?

Kusama’s market cap continues to increase significantly, and Polkadot and Kusama will offer nearly identical security. Only a handful of projects will win a space on Kusama after the first parachain auction, but those that do build on the network first will likely establish themselves as key infrastructure players.

Like Polkadot, Kusama aims to be a completely decentralized project, so once the parachains are launched, the future of both networks will depend entirely on the on-chain governance of their respective communities.

By participating in the crowdloan, KSM holders will be losing both their staking rewards and the opportunity to sell or trade KSM at optimal moments. Projects that wish to attract a lot of funding will have to compensate investors generously with their governance tokens.


Alina Aseeva is the co-founder of the Idavoll Network, a blockchain infrastructure project that allows creating, managing and governing decentralized autonomous organizations (DAOs). She is also an entrepreneur in the blockchain, fintech and biotech industries. Alina has great experience in business development, strategy consulting for companies, due diligence, M&A and B2B sales across multiple regions.

 
Check Latest Headlines on HodlX


Follow Us on Twitter Facebook Telegram

Check out the Latest Industry Announcements
 

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/dgtl.escapism

Submit a Press Release

Industry Announcements

  • Addressable Raises $7.5 Million To Enable Web 3.0 Companies To Acquire Users at Scale
    January 31, 2023
  • SIMBA Chain Awarded $30 Million US Air Force STRATFI
    January 31, 2023
  • Bunzz Raises $4.5 Million Seed Round To Expand Its Smart Contract Hub for DApp Development
    January 24, 2023
  • Dogecoin and Shiba Inu Better Watch Out – Floki Just Had Three Big Things Happen for It
    January 24, 2023
  • Crypto Marketing – What Initiatives Will Bring More Value and Users in 2023
    January 23, 2023
  • Make Crypto Payments on BChat Web 3.0 Messenger – BChat Integrates Beldex Wallet
    January 22, 2023
  • KEY3.id Supports Multi-Chain Transaction, Partnership With KuCoin Wallet, CoinHub Wallet and Wallet3 To Launch 2023 Lucky Transaction Campaign With Over 30,000 Participants on Social
    January 20, 2023
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$23,001.16
$23,001.16
1.24%
Ethereum
$1,580.67
$1,580.67
1.1%
Cardano
$0.387299
$0.387299
4.21%
XRP
$0.406491
$0.406491
3.14%
Dogecoin
$0.095462
$0.095462
9.46%

Spotlight

  • Can Avalanche (AVAX) Do a 50X? Crypto Bull Mark Yusko Says Ethereum and Layer Ones To Outrun Next Bitcoin Rally
    January 24, 2023
  • Institutional Investors Believe One Crypto Asset Has the Most Compelling Growth Outlook in 2023: CoinShares
    January 27, 2023
  • Analyst Nicholas Merten Issues Warning, Says Stocks and Crypto About To Trap Traders Before New Lows
    January 30, 2023
  • New Cardano (ADA) Stablecoin Launch Revealed – Here’s When Djed Comes Out
    January 25, 2023
DON'T MISS A BEAT
Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options
By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.
Featured Image: Shutterstock/Billion Photos

Cryptocurrency news and analysis, covering Bitcoin, Ethereum, Ripple, XRP, altcoins and blockchain technology

Categories

Bitcoin • Ethereum • Trading •
Ripple and XRP • Altcoins •
Blockchain • Regulators •
Scams • Crypto101 • HodlX •
Futuremash •
Industry Announcements

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT | ADVERTISE

JOIN US ON TELEGRAM

JOIN US ON TWITTER

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2023 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX

© 2023 The Daily Hodl