Polkadot & Kusama Crowdloans and Parachain Auctions — Simplified

Background info on crowdloans and parachain auctions

Parachain Slot Auctions

What are Crowdloans?

  1. the team could host another crowdloan
  2. the team may decide it doesn’t need a parachain slot anymore or move to a parathread (pay as you go model)
  3. A team with sophisticated parachain functionality like Acala’s decentralized sovereign wealth fund (dSWF) could build up its own on-chain wealth fund, or treasury, to become self-sustaining and self-fund future slot auctions without the need to hold another crowdsourcing event.

Crowdloan and parachain auction Q&A from This tweet:

  • M D: @empidavies and @VoiceMyAmbition
  • How Many slots are available in each individual auction? 1 Or Multiple?
  • This gets a little confusing. Technical teams can bid for up to 4 slots (each 6 months) for a total of 2 years. So a team could choose to only bid for 6 months, or they could max it out and bid for the full 2 years.
  • Al: @friendzoneAl
  • Can I do anything else with the tokens that are loaned in the crowd loan? E.g. could I stake them AND contribute them to the crowd loan at the same time?
  • No. The tokens you stake/bond in support of a parachain team will not be able to be used for anything else. This is the trade-off contributors accept when participating.
  • ElTukko: @eltukko21
  • The $KAR & $ACA rewards by leasing $KSM / $DOT will be distributed in a single drop once the auction is awarded or will be distributed daily/monthly similar than a staking reward?
  • Yes, the rewards will be distributed in one transaction. However, tokens may be subject to a vesting period. For KaruraNetwork for example, 30% will be unlocked while 70% will be subject to vesting.
  • travi: @travis_turner
  • Will auctions for both networks be conducted the same?
  • At the beginning, Kusama parachain auctions will begin first. Once Kusama parachain auctions start and things are running smoothly, then Polkadot auctions will begin. However, it’s definitely feasible to think auctions on Polkadot and Kusama could run in parallel in the future.
  • Polkadotters: @Polkadotters1
  • How often will be opened the new slot for Kusama? Does it make sense for a project to reward users who lock $DOT in this stage for Kusama parachain auction (or just $KSM)?
  • We are actually waiting to find out how often new slots will open (and auctions happening). I’d expect them to run pretty frequently, potentially like 2 per month. 2nd question: No one can lock DOT for Kusama-based parachain auctions. Only KSM.
  • SchemeDream: @SchemeDream and @AceCrypto2324
  • How many competitors are there going to be per bracket? How many parachains are being offered this year? Who is your favorite vs who is the underdog?
  • We won’t know until the parachain auction actually begin. There could be a secret whale who comes in to buy a slot on her/his own. We also don’t know how many slots will be open in 2021 but the goal and plan is to reach 100+ live parachains on Kusama and Polkadot.
  • TradingTalks: @tradingtalks48
  • Will the parachain auctions be visible to all participants or unknown? so essentially you have to bid as high as possible without knowing who has bid the highest?
  • The parachain auctions will be on-chain and completely transparent. You’ll know exactly how much each project or participant has contributed at any point in the auction. I’m waiting to see who will build the website/app to watch this event live…we need a live scoreboard!
  • A Handsome Man: @twinsforum
  • well who are the top contenders for the parachains?
  • There are several great teams who plan to participate, but we won’t know until the day of the event who truly participates.
  • lateadopter: @lateadopter8
  • Will we see any institutional parachains in the future?
  • I would be shocked if we didn’t see an enterprise or government parachain of some sort in the future. Only time will tell, but the possibilities are endless. Someday the Polkadot Council could include people like heads of government, CEOs of Fortune 500 companies, etc. who have a strong interest in the direction of the network.
  • kqryptic: @dlrowehtfoweiv
  • Do parachains have to prove themself for 2 years on ksm before becoming a dot parachain, or are both auctions done at the same time?
  • No, parachains can launch on Kusama then launch another network on Polkadot immediately after, and run both at the same time. It can be seen like a bank opening a branch in Germany and another branch in China — both countries have demand for services (same as Polkadot and Kusama).
  • Naruto: @Naruto22670619
  • is there going to be an integration with metamask so that we can store our ksm and dot on metamask?. Also, will Kusama or Dot will be used as a collateral for Acala?
  • I hope someone builds something meant for end-users and optimized for user experience. Right now the only option for browser extension is Polkadot.js. 2nd question: Yes, KSM and DOT will be integrated into Acala and Karura’s DeFi apps.
  • The Thi3rd: @KSBISTSR
  • Based on ppl been lazy, Will web3/Parity be releasing YouTube vids explaining the rules of engagement around parachains (how candle auctions work, parachain slot thresholds etc) ?
  • II’m expecting many leaders to step up amongst parachains to start taking on some of this educational work for the community (including us at Acala).
  • Paper Trails: @GT3_BTC
  • How many spots are available on each? Is the $DOT/ $KSM locked up in the voting process?
  • There will be up to 100 or more slots open on both Polkadot and Kusama. Yes, if a parachain crowdsources DOT using the ‘crowdloan module’, then that DOT will be locked trustlessly in the Polkadot Relay Chain for the duration of the parachain slot (up to 2 years on Polkadot).
  • boyswan: @boyswannn
  • Do you think a cap will be applied to the KUR/ACA crowdloan, such as the maximum needed for n-years lease? If so, will it be first-come-first-served?
  • This is totally up to each parachain team. Since the crowdloan’s purpose is to help bootstrap the parachain auction, it is likely that teams wouldn’t have a maximum.
  • WE COULD BE KINGS: @cya_at_the_top
  • What is the cadence for auctions and how many for each? If you are staking the dot already on an exchange will you still be able to vote for parachain auctions or will you have to remove that stake and restake.
  • I’m wondering the same thing! We don’t yet know the cadence of auctions, but it’s likely to be around every 2 weeks. 2nd question: It depends on if your exchange is offering support for parachain auctions. If they do not, then you’d need to move your DOT/KSM to somewhere that does support participating.
  • @YuNing_Qiu
  • KSM will break up?
  • I assume you’re talking about Kusama doing a redenomination like Polkadot did. This is highly unlikely given how engrained Kusama is in wallets, exchanges, and other infrastructure. If it did get proposed, it would have to pass a governance vote but I think it would be very messy to try to do this at this stage.
  • Joel Jakob: @JoelJakob3
  • Will ALL projects first go through Kusama or will some bypass and launch directly on Polkadot? Also, are any projects going to be guaranteed a parachain based on their benefit to the entire ecosystem? If so, which projects? Thank you.
  • Certainly all projects won’t take the same path. Some will go thru Kusama first, then Polkadot. Some will go to Kusama and stay there forever. Some will go only to Polkadot. It depends on the team and what their needs are.
  • 2nd question is great: Yes, some projects or bridges could be guaranteed a free parachain slot if they serve a specific purpose. This is called a “common good”. These system-level parachains could be a bridge to another network or a functional chain like a governance parachain that removes work from the Relay Chain., making the relay chain more efficient for parachain processing.
  • Investkwon: @investkwon
  • Will there be a max cap to each address taking into account bot distribution into other many unique wallets? One way is by doing kyc for each. How do you intend to hinder/block bots from participating in the auctions?
  • This depends on the specific team and how they choose to approach the crowdloan process.
  • DerMonte: @DMonte0
  • Can we integrate Bitcoin?
  • Bitcoin cannot be integrated into the crowdloan process (yet), but Bitcoin is very much being integrated into the Polkadot ecosystem through bridges like Interlay, ChainX, and RenBTC.

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