19.4 C
New York
Tuesday, October 26, 2021

Buy now

The Kusama network prepares to hold its next five parachain auctions




Kusama is a platform that acts as a test environment, or called “canarian network”, for developers to experiment and determine the efficiency of their blockchain code and applications before their official launch on the Polkadot network.

Due to the trial-and-error nature of Kusama, developers can benefit from a less stringent governance framework, as well as lower staking requirements than they would see in Polkadot.

After the success of its first auctions of parachains (secondary chains) in June of this year, The Kusama Council is preparing to schedule another five auctions planned for the next few weeks.

The parachain auctions in Kusama adopt an unconventional historical method of auction analysis called candle method, pOr which users bid during a fixed time allotted to the auction, locking their KSM tokens for their favorite project. The winner of the auction is the project that receives the highest total funding.

In the modern age, retail consumers will be familiar with this hourglass approach through its application in the bidding process on the eBay e-commerce platform.

However, this method also has flaws. Above all, front-running issues, which fuel insiders’ information characteristics, and last-minute bidding wars skew the data set, as all bidders know when time is up.

With the complementation of Blockchain technology, the arguments in favor of candle auctions (as addressed in research by the Web3 Foundation this year) are twofold: “Front-running and the presence of smart contracts among bidders”.

Although auction participants know the start and end block times, they do not know the crucial end block time with the five-day end period. This ensures that no participant can predict when the auction will end, guaranteeing each project an equal opportunity to acquire value.

The first parachain slot auction of this new round, and the sixth in total, will begin on September 1. The initial bidding period will last for two days, followed by a five-day ending period. In total, five auctions will be held over a five-week period, with a scheduled interval to assess the performance of the network.




Auction hours are scheduled for 12:00 pm GMT on September 1, 8, 15, 22 and 29.

For the first round of parachain auctions between June 15 and July 20, 18 independent teams have registered to participate in the campaign of crowdloan, receiving funding from nearly 20,000 unique accounts that contributed to a total of more than 1.3 million KSM tokens (approximately $ 450 million).

The crowdloaning o community loan is a mechanism designed to promote decentralization in parachains by distributing tokens to users in exchange for their locked assets. The method bears similarities to Ethereum liquidity mining, whereby participants can receive token grants from their favorite DeFi project.

If a community loan campaign is successful, that parachain will be incorporated into the Relay Chain, and the collective tokens will be blocked in the account of that parachain for as long as it is active.

In the case of the first five auctions, most of the slots were overpaid, a positive marker for decentralization and spreading the value of individual projects.

The cryptocurrency exchange Kraken announced support for parachain auctions, allowing clients to lock Kusama’s KSM tokens on its platform.

Of the participating teams, It was decentralized exchange platform Karura that took the top spot, recording an initial total locked value of more than 500,000 KSM tokens, valued at $ 90 million at press time. The platform subsequently advanced to jump in both Polkadot and Kusama the following month. Other notable auction successes were Moonriver and Shiden, who received more than 205,000 and 138,000 KSM tokens, respectively.

Community loan contributions from the top three projects on a daily basis. Source: Polkadot

Keep reading:




TAMMY SEWELL
Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
2,997FollowersFollow
0SubscribersSubscribe

Latest Articles