Dialogue with Parallel, Astar, and Litentry: How to amplify the benefits of parachain crowdlending
On November 11, the Polkadot mainnet will officially launch the first round of parachain slot auctions.
After the previous Kusama auction, many users who participated in crowdlending earned a lot of money, which also attracted more users to turn their attention to the upcoming mainnet auction, hoping to get a share of it. In order to clear the fog and help users find the best crowdfunding path, Odaily held a multi-party AMA discussion with Parallel, Astar, Litentry and other three top projects in the Polkadot ecosystem on November 3. How do they prepare for the auction? What is the most recommended way to participate? Please read and understand in the compilation of AMA highlights below.
Q0（To All）：Today is a multi-person AMM. In order to facilitate the audience and friends to understand and distinguish the projects represented by the guests, please give us a brief introduction first.
Jennifer（Parallel）：
Hello, everyone, I'm Jennifer from Parallel, and I'm mainly responsible for the Parallel marketing.
A product recently launched by Parallel is called Auciton loan, which is a derivative scheme related to auction crowd lending. Users can participate in crowd lending in the form of Auciton loan and get more extra rewards. For example, when you vote for a certain project to bid for the auction, you can get the basic crowd loan reward given by the project itself, and you can also get additional rewards for the project to cooperate with us, such as the two participating AMA tonight Projects (Astar, Litentry) have cooperated with us in this regard. In addition, each DOT participating in the auction will receive an additional reward of 4 PARA. In addition to extra rewards, participating in crowd lending through Auciton loan can also unlock the liquidity of pledged assets and freely control the corresponding derivative tokens. You can use this derivative tokens to lend DOT in our lending market, or in the AMM market Sell it directly.
Parallel is a DeFi parallel chain, and we will provide a variety of DeFi products. The first product we launched is Auciton loan, the purpose is to help everyone participate in crowd lending more conveniently and get more benefits. Next, we will launch products such as the lending market, AMM DEX, liquidity pledge, and cross-chain wallet. Our goal is to make the assets of the Polkadot ecology have greater profitability and better liquidity, so that this set of DeFi gameplay can work better.
Mel（Litentry）：
Hello everyone, I am BD Director Mel from Litentry, thank you very much and Parallel for the invitation.
Litentry focuses on decentralized identity solutions, and we provide a network for cross-chain aggregated identities. Due to the fragmentation, non-interoperability, and scarcity of data on the chain, users often cannot obtain better services through historical identity behavior or authentication. At the same time, blockchain service providers such as DeFi lending, games, and NFT display, etc., It is difficult to find target users or provide customized products and services due to the fragmented properties of the data on the chain. Litentry's cross-chain aggregation identity is to solve this series of problems. By indexing multi-chain data or data analysis results, the identity data is aggregated and calculated in the privacy environment of Offchain TEE workers, and finally provides users with a multi-chain, aggregation It can be widely used in many scenarios such as lending, on-chain governance, airdrop or IDO whitelist.
Litentry is currently online and the products under development include: 1) My Crypto Profile that connects to the identity and displays NFT on Twitter; 2) IDO whitelist service based on the identity information on the chain; 3) supports voting on the Polkadot ecological chain Mobile App. We plan to develop more identity applications in the future and invest in the Polkadot ecosystem.
Song and Ming Dynasty (Astar):
Hi, I'm Mingshi from Astar, thank you very much for the invitation from Parallel.
Astar Network (formerly Plasm) is a multi-chain multi-virtual machine DApp center on Polkadot, which natively supports Ethereum Virtual Machine (EVM), WebAssembly, Layer2 solutions and DApp Staking. Shiden is Astar's pre-network. Won the first batch of Kusama card slot auctions on July 7 this year, becoming the third parachain on the Kusama network.
In terms of design, the Polkadot/Kusama relay chain itself does not support smart contracts. Developers who want to develop within the Polkadot ecosystem need to use Substrate to build their own parachains. This model has several problems: 1. Smart contracts are still the most mainstream development method at present. It is difficult for most teams to build parachains with Substrate and the development cycle is long. 2. The economic cost of bidding for parachain slots is huge, and there is no short-term demand for most projects. Therefore, Polkadot/Kusama needs a high-performance smart contract platform.
As a smart contract platform, Astar/Shiden supports both Ethereum Virtual Machine (EVM) and WASM through X-VM (Interactive Virtual Machine), and realizes the call interaction across contract engines. EVM is currently the mainstream paradigm for smart contract development, and WASM is the high-performance contract paradigm that future blockchains, including Ethereum 2.0, will adopt. X-VM means that smart contracts based on the current Ethereum Solidity and future WebAssembly can be deployed and interacted on Astar, bringing stronger composability and interoperability to the DApp ecosystem.
At the same time, Astar/Shiden will become a scalable DApp center, supporting two-layer expansion solutions including Optimistic Rollup and ZK Rollup. Building DApps in the Polkadot/Kusama ecosystem through Astar/Shiden will have lower gas fee costs, greater throughput, and faster final results for users and developers.
In addition, Astar/Shiden is a multi-chain DApp center with Polkadot/Kusama XCMP and bridges connecting Ethereum, BSC, Cosmos, Solana and other blockchains to facilitate the entry of external assets into Astar. And Astar's unique economic mechanism, including DApp Staking and Operator Trading, enables DApp developers and community members to reap rewards from the active technical ecosystem and further promote its development by choosing to support DApp staking.
Q1 (To All): All the guests present today are from the highest-quality projects in the Polkadot ecosystem. Previously, Kusama, the first Polkadot network, has conducted multiple rounds of parachain slot auctions, and some of your project parties have also successfully auctioned slots.My first question is, looking back at the auction process on Kusama, have you learned any experience or lessons? Will strategic planning for mainnet auctions be adjusted based on these lessons learned?
Jennifer（Parallel）：
After the previous Kusama auction process, we found that the support of users is actually very strong, so in the main network auction, we will strive to start the auction as soon as possible to obtain more user support.
In this round of auctions, we actually have an advantage, that is, the Auciton loan product we have already launched. As mentioned earlier, you can get more income through this product, which may help to increase the overall exposure of the project . Recently, you can see that many big Vs on Twitter are constantly mentioning our project.
For the mainnet auction, Parallel will use about 10%-15% of the total supply as incentives for crowd lending. Each DOT can get about 33 PARA rewards. In addition, we also have an early bird incentive of up to 40%.
Mel（Litentry）：
Litentry did not participate in the Kusama auction, but we can share why we chose to participate in the Polkadot auction instead of the Kusama auction.
The first is a matter of prioritization and resource allocation. The preparation of the Kusama parachain auction will greatly consume the resources of our team. Not only because we need to build products within its ecosystem, but also because the launch of a new network requires a lot of external cooperation. If we participate in the Kusama auction first, our time to participate in the Polkadot auction may be delayed, and it will also affect the application of LIT, and we hope to bring usage scenarios to LIT as soon as possible.
The second is that if we participate in the KSM auction, we will need to provide LIT rewards to KSM supporters and greatly dilute the value of LIT. This will also reduce the value we can provide to DOT supporters during the Polkadot auction. Second, we predict that more attention, resources, and traffic will be attracted to Polkadot’s first round of auctions.
Based on the above reasons, we will invest more in Polkadot auctions next. However, Litentry has not given up on Kusama, but plans to participate in the future when resources are more abundant.
Song and Ming Dynasty (Astar):
Astar's Pioneer Network Shiden participated in Kusama's first batch of parachain auctions in July this year and won Kusama's third parachain slot. During the Kusama slot auction process, we learned some lessons and made corresponding improvements in this parachain auction.
The first lesson is that when Astar’s Pioneer Network Shiden participated in the Kusama parachain auction, we designed an overly complex economic incentive mechanism. At that time, our design was that participation in different time periods of the auction would correspond to five levels of rewards. We encountered a lot of difficulties in explaining this set of logic to the community, because it would involve complex mathematical calculations, which many community members could not fully understand, so when the parachain slot auction first started, because this was too Complicated reward mechanism, we lost some advantages. In this mainnet auction, we have greatly simplified the reward rules, and the rewards have been directly divided into a basic reward of 15% of the total supply and an additional reward of 5%.
The second lesson is the design of the auction entrance. During the Kusama parachain auction, we did not design a user-friendly front-end page because Shiden was launched in a hurry, but for this mainnet auction, we designed it like this a front end. Users can fill in the referrer address through this front end and get the corresponding referrer rewards.
Q2 (To All): As the mainnet auction is approaching, major projects in the ecosystem are gradually disclosing their own Crowdloan incentive plans. Can you please introduce the specific incentive plans of your own projects?
Jennifer（Parallel）：
In addition to the basic rewards, Parallel's reward plan will also have a timeline-based early bird reward, which can get up to 40% extra rewards. We expect to start the crowd lending activity on the 4th or 5th, and until the official start of the crowd loan on the 11th, participating users can get this extra reward of 40%. In addition to this additional reward based on the timeline, we also have a referral reward, so relatively speaking, Parallel's incentives this time are still very high.
Portal Twoportal one、Portal Two), here will be a more detailed introduction to our Auciton loan.
Mel（Litentry）：
Litentry will dedicate 20% of the total supply to incentivize backers who help us gain an advantage in auctions.
Specifically, all auction supporters will share a reward pool of 20 million LIT in total. In order to maintain generous rewards, we will limit the maximum amount of the crowd lending pool to 8 million DOTs, which means that each DOT can get at least 2.5 LIT rewards, but the final rewards will be calculated according to the proportion of participants' contributions .
In addition to this basic reward pool, users can also get up to 20% extra rewards, including early bird and identity rewards, etc. At the same time, users can also use Auciton loan to unlock DOT liquidity and get additional PARA rewards.
When designing incentive plans, in addition to competitiveness, we also need to take more factors into consideration such as incentive fairness, opportunity cost, token economy, and long-term project development. Although we hope to gain more bidding advantages by increasing incentives, we still believe that the value of the project depends on the value the project brings to the entire ecosystem, industry and society, so we need to control costs and pursue the sustainability of the project .
Before the auction starts, we will also cooperate with some centralized exchanges to provide participants with better liquidity and more additional rewards. Please pay close attention to our latest news.
additional materials:Details of Litentry Crowd Loan Incentive Program
Song and Ming Dynasty (Astar):
15% (1.05 billion ASTR) of the total supply of ASTR (7 billion) will be distributed to crowdlending participants according to the number of pledged DOTs as a basic reward. 5% of the total supply of ASTR tokens (350 million ASTR) will be distributed to crowdlending participants as additional incentives according to the additional incentive rules.
Additional reward rules:
1. Referral reward: For every DOT staked by the referee, the referrer will receive 10 ASTR rewards. Referees get an additional 1% bonus on top of the base bonus.
2. Early Bird Rewards: Participants who join in the first week of Crowd Loan (before 11.18) will receive an extra 20% reward on top of Crowd Loan’s basic rewards.
3. Early support rewards: Shiden crowd lending participants can get 10% extra rewards on top of the crowd lending basic rewards by participating in the original address.
Regarding the participation method, users can choose to participate through centralized exchanges, such as OKEx, Binance, Kraken and some other exchanges. All mainstream centralized exchanges that support Polkadot parachain slot auctions will support Astar crowd lending; others Decentralized participation portals include Fearless Wallet, Nova Wallet, Astar official Crowdloan webpage, Polkadot.js wallet, etc.; users who want to obtain liquidity derivatives can also participate through derivative programs provided by projects such as Parallel, Equilibrium, and Bifrost.
Q4 (To Parallel): In addition to the incentive plan for crowd lending, today’s AMM has another major theme—Acution loan. Prior to this, Parallel has announced that it will provide Astar and Litentry with additional rewards for participating users through Action loan. Jennifer (Parallel), can you introduce the specific operation mechanism of Action loan? Where do additional incentives come from?
Jennifer（Parallel）：
Well, Auciton loan is actually our main product now. It has been about a week since it was launched. In fact, many users at home and abroad are looking forward to this product. The main function of Auciton loan is to help users get more rewards for crowd lending, and at the same time unlock the liquidity of pledged assets.
For example, if you want to vote for project A, if you participate through the official Polkadot. Additional rewards. These additional rewards are mainly composed of two parts. One is that the project that cooperates with us will provide part of its reward plan to the participating users of the Auciton loan platform. An additional reward of 4 PARA will be given for each DOT.
In addition, users also unlock the liquidity of pledged assets through the derivative token cDOT. The part about cDOT is worth mentioning, which is another advantage of Parallel. When the Parallel parachain goes online, users can freely use cDOT in various DeFi products provided by Parallel, and do whatever they want, such as taking it to our lending market to mortgage and borrow coins, or directly buying and selling freely in AMM DEX. After the two-year pledge period ends, cDOT can be exchanged for the originally pledged DOT at a ratio of 1:1.
Q5 (To Astar, Litentry): For Astar and Litentry, what is the motivation for choosing to integrate Action loan?
Mel（Litentry）：
The biggest motivation is that we want to reduce risk and unlock liquidity for staked assets for DOT holders. Considering these needs, Parallel is an ideal partner for us. The integration of Acution loan is a very critical part of our crowd lending plan.
Song and Ming Dynasty (Astar):
We are also motivated by the same motivation, and we are also optimistic about the prospect of cDOT being used as collateral in the Parallel lending market in the future.
Q6 (To Parallel): In addition to Action Loan, there are currently other derivative solutions for crowd lending scenarios on the market (such as SALP by Bifrost). Compared with other solutions, what are the core advantages of Action Loan?
Jennifer（Parallel）：
Many people have asked this question, and everyone's concerns are mainly focused on two aspects. One is the difference between us and Acala, but the difference between our liquid staking scheme and Bifrost.
Let me talk about the first point. We are indeed very similar to Acala in terms of positioning. The main difference lies in the design of the product. For example, in terms of liquidity staking and lending markets, we will have a margin staking, which will have a higher capital utilization rate than general DeFi products; as for the second point, Bifrost is mainly doing liquidity staking solution, but we also have a lending market and AMM DEX. The cDOT generated by everyone here can be directly used in our DeFi products. The purpose of this design is actually to improve the efficiency of users’ funds and allow users’ assets to circulate .
It is worth mentioning that an important part of the lending market is the supplier, that is, the asset supplier, because when users mortgage cDOT, they need to be able to lend other assets. From this perspective, we actually have an advantage. If you have seen our previous financing news, you will find that our capital has a very strong background. These capitals will earn interest by becoming asset suppliers. In turn, users In other words, more assets can be lent to maximize the utilization rate of funds.
PortalPortal) is talking about the design idea of our Liquid Staking solution, including the Acution loan mentioned above. You should not have seen products with similar ideas in the Polkadot ecology or even other imitation ecology, because these things are our original ones. It is a product designed and developed by ourselves.
