Polkadot’s parallel chain is getting a lot of attention, but the exact date has been a mystery

Polkadot’s parallel chain auction will mark the most important milestone on the roadmap since the launch of the main network in 2020.

Polkadot's parallel chain is getting a lot of attention, but the exact date has been a mystery

Polkadot’s parallel chain auction will mark the most important milestone on the roadmap since the launch of the main network in 2020. Currently in beta on the Rococo network, the next phase of the release will involve the launch of the parallel chain on the Kusama “Canary Network”, which will then roll out the Polkadot parallel chain on the main network.

The main Polkadot network has been in operation for almost a year now. However, only the central relay chain is up and running, with the last 12 months of development focused on implementing decentralized governance of the platform.

With the first release already rumored for Q1 2021, almost three months have passed since the development roadmap was announced and no firm date for the final deployment is yet available. So what can we expect from this launch, and which projects will participate in the auction?

How does the parallel chain auction work?
Parallel chains are actually fragments on the Kusama or Polkadot network, and the purpose of the auction is to allocate parallel chain slots to projects that wish to run on either network. The overall goal is to have 100 parallel chains running at the same time. However, these slots will be opened in batches, with the goal of running about 30 parallel chains within the first year.

Projects wishing to obtain a Kusama parallel chain slot can participate in the auction by tying their KSM token in the decentralized candle auction.

Candle auctions are a variation of public auctions that do not give a fixed end time. Such auctions appeared in the 16th century. The purpose of this was to encourage participants to make their highest bid early, since they did not know when the auction would end. It thus prevents “sniping”, where bidders enter with winning bids in the last few minutes.

After the bidding ends, the random number generator will determine the end of each auction instead of the candle. Therefore, if a later bid enters after the retroactively determined closing time, it will be disqualified.

It is worth noting that the winning bidder will not “buy” their slots, but only rent them, while the total value of the bids is fixed for the duration of the auction. The lease term will be fixed (the term may vary between Polkadot and Kusama), and items can be bid for up to four consecutive periods. Therefore, the total duration of the bid will also be weighted to its value.

At the end of the final lease period, the ad space will be auctioned again.

Peter Mauric, head of public affairs at Parity Technologies, the company behind the development of the Polkadot ecosystem, said competition is likely to be fierce. Speaking to Cointelegraph, he said.

“In my opinion, especially in the early rounds of Kusama and Polkadot, the competition is expected to be quite tight. Since there is usually a competitive auction at the beginning, I suspect projects will be seriously disappointed, especially considering that there will be a new position to bid for every two weeks.”
Which projects will bid for the parallel chain slots?
In theory, any project could participate in the parallel chain slot auction. However, they do need to have a codebase and must hold or crowdsource enough KSM or DOT tokens to outbid competitors.

In addition, the Kusama Association has expressed interest in rewarding infrastructure projects that are considered to be for the “common good” of the ecosystem. These are PolkaBTC, which provides a bridge to the bitcoin blockchain, and Snowfork, which bridges to the ethereum blockchain. similarly, Statemint, a universal asset issuance platform, has been proposed as the first pro bono project for the Polkadot network.

Several projects have already expressed interest in participating. Acala, which aims to be Polkadot’s one-stop decentralized financial services provider, will bid on its Kusama implementation called Karura. Moonbeam, an ethereum-compatible smart contract platform, will be looking for slots for its version of Kusama, called Moonriver. Kilt, which aims to provide decentralized credentials in the form of a common login for Web 3.0 applications, will also seek to secure parallel chain slots. All three projects are very active on the Rococ test network and have active community participation.

Cointelegraph spoke with Dan Reecer, vice president of Acala, about putting the dual Kusama-Polkadot implementation into practice. He explained that both Acala and Karura want to be decentralized financial centers for their respective platforms, and that the project plans to run them both in perpetuity. However, each has a role to play, as he says.

” The difference between Karura and Acala is that with Karura, we will be more willing to take risks and try new features and products. We are following the Polkadot ecosystem paradigm for test networks, from the pilot network (Kusama) to the main network (Polkadot.) Acala will remain a bankable, risk-averse network for DeFi on Polkadot, with potentially much higher TVL and assets under management.”
While the roadmap does not set any dates, it appears to be ready to put the project into production within weeks or even days of securing a location. derek Yoo, founder of Moonbeam Network, confirmed that Moonriver is almost ready to deploy. He told Cointelegraph: ” Moonbase Alpha has been running continuously since September 2020, and by then we had released six environment upgrades, each with significant new features,” he added.

“We’ve been able to iterate quickly because we have a stable test network environment and we think it’s well prepared for us to go live as a parallel chain.”
IngoRübe, CEO of Kilt Protocol, told Cointelegraph, “After winning the Kusama parallel chain slot, Kilt will go live in days, not weeks. The decentralized identifier (DID) and verifiable credential functionality is ready and stable on our test network.

If demand for slots is indeed high, then many other projects may express interest in competing for slots on Kusama, especially given that many projects have been patiently waiting for parallel chain auctions without a firm date. It happens. Plasm, Darwinia, Robonomics and Crust are just a few of the other projects that may be involved.

What about prices?
Assuming the card slots are competitive, this is a reasonable enough predictor for KSM and DOT to take some bullish price action. On the most superficial level, more competition means that bidders are likely to be high from the start. Since the tokens are secured for the duration of the lease, it will remove a portion of the circulating supply of DOTs and KSMs from the market, thus limiting supply.

However, the Kusama Parallel Chain auction is the first of its kind and therefore there is a risk that it will not go ahead as planned. Even though the barriers to entry for acquiring slots are set quite high, there are opportunities for outside participants some of whom attempt to outbid competitors purely by selling at higher prices on the secondary market.

Indeed, this is a situation recognized in Polkadot’s documentation. Such actors may also try to “squat” on the sidechain slot just to prevent other projects from using it.

This situation does not look good for the Polkadot ecosystem and will be difficult for projects that want to get a parallel chain slot. Regarding the price of the token, it is hard to say. On the one hand, a bidding war could have a positive impact on the price, but on the other hand, a damaged reputation could offset any bullish effect.

How the leasing rules and the ongoing auction process will affect the overall stability of the Polkadot ecosystem is another unknown. Projects that are already running may lose their place offline. Similarly, bidding wars in auctions may bring good news for token prices, but they may prevent smaller projects from participating.

However, Parity’s Mauric doesn’t think this will be a problem. He explained to Cointelegraph that early parallel chains are most likely to end up in the hands of “well-established projects that have been building their substrate-based chains for years,” and further elaborated.

“For a project that will not initially win a place on Polkadot, there are several options, including deploying the parallel chain on Kusama or exploring its deployment as a parallel thread in the future. Many application layer projects will be deployed on parallel chains at launch, which provides more opportunities for teams and projects to collaborate and build on active parallel chains, if that is the goal of their community, while waiting for their place.”
Caveat emptor
Ultimately, the highly anticipated launch of parallel chains doesn’t just mean good news for the projects involved or those holding KSM and DOT tokens. For example, while BTC and especially cottage coins have experienced a boom in recent months, DOT’s price has been moving sideways since its initial spike above $40 in mid-February. Further delays in issuance could put more pressure on the price of the token.

Finally, please beware of scammers when considering participating in the crowdfunding process. kusama’s auction page warns that there may be fake crowd lending campaigns going on with these rounds. Therefore, if you intend to pledge your DOT or KSM in a smooth-chain crowdfunding round, make sure that you have done your due diligence on the project in question.

None of this is to say that all of these possible worst-case scenarios will materialize and negatively impact the Boka Journey milestone. The project has an off-the-shelf project suite that is ready to go immediately, and from that perspective, this release is likely to be much larger than many other mainnet releases that must subsequently be worked on to attract development.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/polkadots-parallel-chain-is-getting-a-lot-of-attention-but-the-exact-date-has-been-a-mystery/
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