An ultimate guide to parachain auctions on Polkadot
The referendum that will enable registration for parachain crowdloans is going to pass on the 4th of November so now it’s the right time to look at the projects that are going to participate in the first batch of the Polkadot auctions and what benefits they can offer to their supporters.
As of the time of writing, there are roughly 10 parachain projects who signaled that they will try to compete for one of the first slots. So we will start with a brief overview of how the auctions themselves work and then we’ll right jump into concrete projects and terms of their crowdloans.
Contents
- Parachain auctions
- Acala
- Moonbeam
- Astar
- Darwinia
- Equilibrium
- Litentry
- Crust Network
- Parallel Finance
- Manta Network
Parachain auctions
There is only a limited number of parachains that the relay chain can handle, therefore we need to have a way how can projects complete for the slots. This mechanism is called the candle auction — each auction then lasts one week and the winner is given a parachain slot for the duration of its lease period.
Lease period
This is a time duration that determines for how long has the parachain secured its slot. On Polkadot, one lease period is 12 weeks (so roughly 3 months). Parachain can bid for 8 of these periods at maximum (and most of them will go this way) so that means when the project wins the auction, it will secure itself a parachain slot for 96 weeks.
After the lease period is over, a parachain will have to compete for a new slot in the auctions again.
Auction schedule
There are two batches of auctions announced by the Parity team. The first batch of 5 auctions will take place with one new auction every week as we know it already from Kusama. Later on, the second batch of 6 auctions will take place with a new auction beginning in every two weeks.
Unlike on Kusama, all parachains from the batch will be onboarded together when the batch is finished. So, we will see getting the first five parachains onboarded on the 16th of December together.
Crowdloan
Since obtaining a slot requires a significant amount of funds, projects will try to gather support from the community of DOT holders. In return, they offer part of their token supply to its supporters which is an unique opportunity for getting these tokens before they are listed on any exchange. We have recently published a very detailed article on crowdloan participation so we definitely recommend having a look if you want to maximize your profits!
Contributing means locking your DOT token in the crowdloan for the duration of the lease period. As we said, most of the projects will bid for 8 periods therefore all crowdloan participants are locking their tokens for 96 weeks.
If you are curious about the exact mechanics of auctions, crowdloans and parachains, please read our older article where we are going really deep into these topics!
Waitlist
One new ingredient, compared to the previous Kusama parachain auctions, is the waitlist. Projects with a huge amount of supporters interested to participate in the crowdloan offer waitlists for early birds who want to secure their allocation. You will need to register to this whitelist if you want to received special bonuses offered by these projects.
Links to the waitlist pages
- Acala
- Moonbeam
- Darwinia
- Parallel Finance
- Litentry
- Centrifuge (although they will probably not participate in the 1st batch)
Exchanges support
Multiple exchanges have actually announced their direct support for the auctions including the main players such as Binance or Huobi. Although it’s very comfortable to use an exchange and they offer interesting benefits (like Binance’s derivate BDOT token), have a look at our crowdloan article to see why you should consider other options as well.
Projects
Now let’s finally have a look at the projects participating in crowdloans and what benefits can offer you for your support. Here is the list of our favorites for the first slots.
Acala
Acala has a couple of goals to achieve while becoming a central DeFi hub in the Polkadot ecosystem. The most important one is the creation of algorithmic multi-collateral stablecoin aUSD, pegged 1:1 to US Dollar. Another goal is to run AMM-style Acala DEX that will employ aUSD for various token paris (in a similar fashion to Uniswap) or provide liquid staking for the Polkadot network.
Token data
Rewards
We will be pleased if you join the crowdloan via our referral so we can share the reward together!
Moonbeam
Moonbeam is an implementation of EVM (Ethereum virtual machine) based on Substrate which aims to help dApp developers and users to migrate to Polkadot while still being connected to the “old” Ethereum chain via bridges. Moonbeam has been very successful in onboarding new projects to their network so we are really looking forward to their launch. If you witnessed the success of the crowdloan of its canary network Moonriver, you should definitely think of supporting Moonbeam as well.
Token data
Rewards
Unforunately not published yet
Astar
Astar (ex Plasm) is a fully functional EVM & WASM platform on Polkadot not only supporting Ethereum smart contracts but also cutting-edge Layer2 technologies such as Plasma and Rollups that scale these contracts to a new level. There is also support of a Rust-based smart contracts that will be able to communicate with Ethereum contracts seamlessly. Astar will provide interoperability with other bridged blockchains (like Cosmos) to access the entire Polkadot ecosystem.
Another game-changing feature of Astar and its canary network Shiden is dApp staking.
Token data
Rewards
We will be pleased if you join the crowdloan via our referral so we can share the reward together!
Darwinia
Darwinia is a decentralized cross-chain bridge network based on Substrate. It provides a safe, permissionless and non-custodial bridge solution that connects Polkadot with other blockchains such as Ethereum, Tron and others. It can become a central hub for wiring transactions between all popular blockchains and therefore a major exchange of value.
It also features a metaverse called Evolution Land that is unique in its nature because it actually spans multiple blockchains.
Token data
Rewards
Equilibrium
Equilibrium is a cross-chain money market. Cross-chain means that it allows asset trading between all the connected blockchains such as Bitcoin, EOS and in the future Ethereum, Binance Smart chain, Cosmos, Tezos or Tron. Equilibrium will posses all the DeFi tools we already know — trading, staking, lending & borrowing of all the main crypto assets including stablecoins and much more.
Equilibrium also offers xDOT staking that will allow you to stay liquid even when you contribute to the crowdloan.
Token data
Rewards
Litentry
This project is a completely different beast in comparison to other projects mentioned in this article. Litentry is a decentralized identity aggregation protocol across multiple networks — what the hell does this mean? It’s quite simple — as you know, blockchain networks are completely transparent and therefore all of us are leaving electronic trails while we are using services like loans, DEXes or any other dApps.
The goal of Litentry is to aggregate this data for users, verify it and allow them to use their blockchain history for authentication to various services. This is what creates your online identity and the possibilities of having one are endless. Just imagine being invited to DAO based on your previous governance activity or having lower fees on DEX because of your trading volume in the past.
Token data
Rewards
Crust Network
Crust will provide decentralized cloud storage for the whole Polkadot ecosystem. Crust supports multiple storage layer protocols such as IPFS and DHT. It leverages TEE tech for storage work validation and Polkadot’s Substrate tech framework for the chain. It aims to build a decentralized cloud ecosystem that values data privacy and ownership. It will also serve as a storage platform for smart contracts built on top of parachains like Moonbeam, Astar or Phala.
Token data
Rewards
Parallel Finance
We haven't talked about any lending protocol yet, until now. Parallel Finance is a decentralized money market protocol that allows you to lend, stake and borrow in the Polkadot ecosystem.
Besides those “basic” features, we will get also liquid staking, auction loan, leveraged/margin staking and all that backed by the Parallel Insurance Pool.
Parallel will use a dynamic AMM curve to calculate the borrow interest rate depending on utilization but smoother than on Compound or Aave.
With all that and the fact that Parallel will use its canary network Heiko, which already got a slot on Kusama, we have one of the most amazing projects backed by some top-tier investors such as Pantera Capital or Polychain Capital.
Also, Parallel Fi offers auction loans via which you can contribute to the crowdloans and receive some interesting bonuses in return.
Token data
Rewards
We will be pleased if you join the crowdloan via our referral so we can share the reward together!
Manta Network
Manta Network is a privacy-preserving layer for Polkadot. Manta offers a plug-and-play privacy solution for all the DeFi stacks such as minting private variants of traditional crypto assets such as DOT or KSM.
Another great feature is the MantaSwap — a private version of decentralized exchange — something we have been missing in the ecosystem for a long time.
Token data
Rewards
Other projects coming in the following batches
Some other projects worth mentioning are
- Centrifuge Protocol — NFTs as a collateral on the DeFi market,
- Phala Network — storage of encrypted data and confidential smart contracts,
- InterlayBTC — brin(d)ging Bitcoin into the Polkadot network,
- HydraDX — DEX with a single asset pool unlocking immense liquidity,
- KILT Protocol — decentralized identity on the Web 3.0,
- Bifrost — liquidity staking and bridge protocol,
- Composable Finance — bridging Ethereum L2 solutions like Polygon
Conclusion
We have tried to provide an ultimate guide so everyone can understand the benefits of crowdloans. Like we said, most of the projects will provide an easy-to-use interface for you to participate in. Security of your funds is guaranteed by the relay chain and those funds will be returned to you after 96 weeks.
So, if you are a DOT holder and you intend to hold your tokens anyway — then crowdloans are a no-brainer and definitely try to support your favorite project(s)! If not, then consider locking your DOT for various benefits because you will not only get valuable tokens before they enter the market but also support the smooth start of crowdloans and auctions as well!
If you like this article, consider supporting us by the nomination of your tokens to Kusama or Polkadot validator going by the POLKADOTTERS name.
