A few key information you need to know about the Polkadot parachain slot auction
Editor's Note: This article comes fromDealean Capital Research, reprinted by Odaily with authorization.
Editor's Note: This article comes from
, reprinted by Odaily with authorization.
First of all, based on the long-term research of Polkadot's ecology by Delin Capital, we must clearly point out that Polkadot has not realized true ecology.
Even though we see that there are currently nearly 400 projects in the Polkadot ecosystem, most of which are based on the Substrate framework, we can only think that this is a relatively loose "alliance". Sufficient asset scale, when the ecological environment allows, requires a mature market environment to cooperate with the atmosphere and tacit understanding among developers to carry out resource flow and collaboration.
Now the Polkadot ecology may only need to wait for one thing to come. The narrative of Polkadot ecology is mainly based on the idea of "cross-chain". Some developers, primary and secondary market investors, communities, well-known exchanges, Polkadot-related sub-applications, and other external worlds we have contacted all agree with Polkadot ecology. The ecological development of Polkadot is full of expectations. These are the absolute core strengths surrounding Polkadot's ecological construction, coupled with the structural foundation of Substrate, the charm of Gavin Wood himself, and the financial support of the Web3 Foundation, making Polkadot stand out as a star project in the blockchain.
Although we cannot ignore the huge potential that the Polkadot ecology can explode in the future, even with the above aura shrouded in it, we must have an objective attitude towards the development of the Polkadot ecology. The high-degree-of-freedom business mergers brought about by cross-chain, the Substrate framework, and the tremendous power possessed by developers in the Polkadot ecosystem are all key factors that create and support the Polkadot ecosystem as a "new giant" in the market. According to Gavin Wood’s public speech or the team’s internal communication and sharing, Polkadot’s cross-chain is not only the interaction of information and assets, but also the collaboration and free calls of smart contracts and business modules in the future. These will bring Polkadot more funds and opportunities. The Substrate framework and shared security also greatly reduce the barriers to entry and costs for developers.
From the middle of 2020 to the present, the "parallel chain" project in the Polkadot ecosystem and the project that has received the official Web3 Grant have aroused great repercussions in the community. Although the attention to this field has declined recently, it can be seen that , the basic components within the Polkadot ecosystem have become more mature. At the beginning, the capital side judged whether to participate in a project based on factors such as the strength of the technical team, the direction of the project being developed, whether it has obtained an official Grant, but now everyone pays more attention to whether the project they are investing in has financial strength and actively participates in the parachain insertion. slot auction. Everyone in the Polkadot ecosystem is waiting for the parachain slot auction in the first quarter of 2021. Recently, many Polkadot projects are also actively contacting DOT-holding institutions, large households, node merchants and some exchanges to seek Collaboration opportunities on slot auctions. The real start-up part of the development project is heavily dependent on the start of the cross-chain function, so the next highest priority event in the Polkadot ecology must be the "parachain" slot auction. Although it has not yet arrived, it carries the consistency of different roles in the ecology. expectations.
Another point can focus more on Polkadot’s first version of Kusama, most people may ignore this point, because the progress of the Kusama network is usually earlier than the Polkadot mainnet, for example, Polkadot’s pledge time is 28 days, Kusama’s pledge time is 7 days, which means that projects can be quickly iterated and deployed, and more free to try some new directions for application testing, which is more suitable for most small and medium teams.
More importantly, the Kusama "parachain" slot auction is earlier than the "parachain" slot auction on the Polkadot mainnet, and the cost is lower. Therefore, some projects will choose to abandon the auction of Polkadot mainnet parachain slots and choose to participate in the cheaper Kusama "parachain" slot auction.
indeterminate auction
There will be a lot of uncertainty in the current "parachain" slot auction
The first is the uncertainty of timing.
We used to think that this event should happen in the fourth quarter of this year or the first quarter of next year, but at present, it seems that the official has not clearly given a specific time for the Polkadot mainnet "parachain" slot auction. According to the continuous follow-up and in-depth understanding of the "parachain" slot auction progress by Delin Capital, it is certain that all development work should have been completed, but the official has not disclosed when the remaining debugging and testing work will be completed.
The second is the uncertainty of competition.
In fact, as long as they hold enough DOT, almost anyone can directly participate in the "parachain" slot auction competition. Therefore, in addition to the Parachain project itself based on Substrate, there may be exchanges, communities, mining pools , capital institutions, and even large individuals participate in the auction. This will increase the intensity of the slot auction competition, and to a certain extent affect the final slot auction results. The participation of this part of the role has greatly increased the slot auction results uncertainty.
The third is the uncertainty of the "parachain" slot auction method
The candle auction method adopted by Polkadot "parachain" slot auction is different from the traditional auction method. You don't know when the auction will end. Maybe when you are still bidding, the auction has ended. The auction system will randomly select a time point to end, and then return to the final end time point to check the bid candidates at that time, and finally determine the candidate who won the bid. Therefore, we hereby suggest that every rich man and gentry participating in the "parachain" slot auction should submit as many "bids" as possible to increase the chance of winning the bid in the final election. This also increases the competitive intensity of the overall slot auction.
We can foresee that the auction of Polkadot parachain slots will be a fierce battle, and the most intense battle will be the competition of "slot grabbing". Since the lease period of each slot is two years, the auction takes every 6 months as a time period, and bidders can choose one or several adjacent periods. If you run into a very strong auction competitor, and it packs the first year of the first card slot at one time, then the competitor will get priority access to the main network, debug cross-chain functionality and compatibility, and verify cross-chain Chain business priority. The Web3 Foundation and Polkadot officials may provide financial, media, or technical support packages to the top auction winners.
More importantly, the super value of public relations and brand "top slots" in the blockchain industry, whether it is "getting top slots" or "becoming a strong competitor for top slots", these information will make the roles participating in the auction more popular in waves. Part of the commercial value and huge influence in the card ecology. Therefore, no matter who "wins" in the end, they can use this to attract potential future ecological investment users or obtain business development capital through other means. So many players will publicly announce their slot campaign plans. But in fact, Polkadot has not yet received an official parachain slot bidding plan, which also makes the time node very uncertain.
Ingenuity in Auction Design
The Polkadot parachain slot bidding right is not permanent, but a 6-month lease cycle, because those who participate in the auction can choose a time cycle or multiple adjacent time lease periods, so there will be many different auctions Combination method, which can ensure the fair competition of the parachain slot auction, because the longer the lease period of the slot, the higher the cost of the winner, and there is only one slot in each auction.
We estimate that the cost of the first "head slot" auction should be between US$1 million and US$1.3 million. At present, only a few strong projects can independently participate in the bidding. In addition, Polkadot officials allow projects to raise bidding funds through IPO . Ordinary investors can directly transfer the DOT in their hands to the relay chain account and choose the projects to support. After the slot lease expires, the DOT will be returned in the same way.
The auction will deeply change the flow structure of Polkadot's existing ecological assets. In a sense, the parachain slot auction is a mechanism for screening high-quality projects. Only projects with strong funds and high quality from the team or community can receive support and win this "grand prize". For the project side, they only need to do a good job and guarantee the quality of their project without having to prepare a large amount of DOT, which actually reduces the burden on the project.
