Acala made history after recently winning the first-ever parachain auction on the Polkadot network. Similarly, Moonbeam emerged the winner of the second parachain auction.
Result shows that Acala raised a total of 32,515,980 DOT, which is equivalent to $1,143,261,865 from 24,934 contributions. This achievement gave Acala network victory over its rival Moonbeam in the first auction.
In the second auction, Moonbeam raised 35,759,931 DOT ($1,237,293,626) from 48,346 contributions. With this, Moonbeam emerged as the winner. This winning implies that both projects will be launched on Polkadot network. The onboarding/ leasing will start from December 17th, 2021 to October 20th, 2023.
However, the first Polkadot parachain auction took place from November 11th, 2021 to November 18th, 2021. While the second auction started on November 18th and ended on November 25th, 2021. According to the proposal named motion 118 , there will be 11 auctions in the initial stage with the last holding in March 2022.
You must be thinking about what parachain and parachain auction is all about. Not to worry, I got you covered.
The Polkadot Ecosystem
Firstly, you need to know that Polkadot has a revolutionary and groundbreaking architecture. This is to say that, Polkadot has a heterogeneous multichain framework with shared security and interoperability. By heterogeneous multichain, it means that Polkadot can support multiple execution slots. It then releases these slots to good projects (crypto startups), basically through two methods of subscription known as parathreads and parachains.
What is a Parachain?
We can then say that, parachains are the different blockchains that connect to the Polkadot Relay Chain (central chain), having possessed several characteristics required by the Polkadot host. In order to connect and benefit from the features of Polkadot, parachains must lease a slot on the Polkadot Relay Chain for up to 96 weeks at a time, with a renew option.
What is Parachain Auction?
Parachain auction therefore refers to the various bidding events that takes place on the Polkadot (and/or Kusama) central chain, in order to decide on which blockchain will connect to the parachain slot. Parachains are usually sold in an unpermissioned candle auction where the highest bidder wins. Bidding is usually done using DOT or KSM for Kusuma parachain auctions.
5 Things To Note About Parachain Auction
Do you wish to participate in parachain auctions?
Then, these 5 points might help you to further understand the concept of Polkadot parachain auctions;
- Bonding: In bidding in Polkadot parachain auctions, DOT tokens are usually being locked for the duration of the lease. These tokens cannot be accessed by the contributors until the leasing period is over.
- Auction Timeframe: Parachain auctions on Polkadot last for approximately one week only. The winner is announce afterwards.
- Crowdloan: This is an exclusive event that invites supporters of a certain project to contribute DOT tokens in return of earning a share of the project’s native token after the leasing period. Some parachain auction teams resort to this method in funding their auction bid. Crowdloan contributors usually get their DOT tokens back at the end of the lease.
- Auction Cost: Interestingly, Polkadot parachain auction does not require auction teams paying any fee. After the lease, the exact amount of locked DOT tokens will be released to contributors. Auction cost is taken to be the inability of contributors to access their bonded DOT tokens.
- Slot Duration and Lease Periods: Parachain slots on the central chain can be leased for a maximum time-frame of 96 weeks. However, parachains can choose the length of their desired lease when bidding on a slot. This can be done by selecting a contiguous range of 12-week increments.
Although it took about five years, the parachain auction launch on Polkadot appears to be a great achievement for the project founders. Who knows, it might just have a positive effect on the price of DOT.