Digital asset firm Kraken notes that customers looking to support their “favorite” Kusama projects can now, “for the first time,” take part in Parachain Slot Auctions (or “Parachain Auctions”) directly via the Kraken platform.
Kusama is described as a “scalable” network of specialized or purpose-built blockchains created using Substrate and uses almost the same codebase as Polkadot. The network is “an experimental development environment for teams who want to move fast and innovate on Kusama, or prepare for deployment on Polkadot.”
Some of the main points to note:
- Parachain auctions are “not available to residents of the US, Canada, Japan and Australia.”
- Only verified Intermediate accounts and higher “are eligible to participate in the Parachain Auctions.”
- Parachain Auctions are “an entirely new mechanism for supporting projects.” It is important that you “understand how they work before participating.”
As explained by the Kraken team, parachains are like customized blockchain or distributed ledger tech (DLT) networks that have been integrated within the Kusama network. Parachains may be customized for various use-cases and “feed into the main blockchain and heart of its network, called the Relay Chain, thus benefiting from Kusama’s network security.”
Only 100 parachain slots are “expected to be available, a number that is flexible and subject to change by governance vote over time,” the Kraken team noted while adding that to claim one of these slots, the parachain projects “have to win a parachain slot auction.”
As mentioned in the update from Kraken:
“For Kusama auctions, the project with the most KSM bonded to support its bid, at the time the auction snapshot is taken, will generally be able to claim the auctioned parachain slot. Projects may, in their discretion, give rewards to contributors who support their winning bid. If the auction is lost, the KSM bonded by contributors may be re-claimed at the end of that project’s specified campaign duration, which may last for one or more auctions.”
For additional information on Parachain Auctions, you may check out Kraken’s “Parachain Auctions Explained” web page.
In the first parachain auction, Kraken will be permitting customers to support the bids of “at least five projects, starting with Karura, Shiden, Moonriver, Crust Shadow and Khala with “potentially more on the way for the first auction,” the announcement confirmed while adding that Kraken will keep supporting more auctions and parachain initiatives in the future.
Here’s a breakdown of the projects on this very first parachain auction:
Karura (KAR) – a decentralized finance (DeFi) hub and stablecoin platform for the Kusama network, Karura is “intended to operate on Kusama as a parachain.” It will aim “to host several different functions on its platform, including a crypto collateralized stablecoin, a decentralized exchange (AMM), access to liquid staking, and an EVM compatible blockchain.”
Shiden (SDN) – Shiden is “intended to function as a smart contract layer for the Kusama network where developers can design and build new decentralized applications.” Built as a parachain, Shiden aims to be “a cross-chain platform, meaning that it can support various smart contracts that are not native to Kusama, including ones built for Ethereum.” Shiden also “supports many layer 2 solutions, offering ways to improve upon its network’s scalability and transaction speeds.”
Crust Shadow (CSM) – Crust Shadow is a file sharing and storage service on the Kusama network. In this way, “you can think of Crust as an alternative to cloud storage platforms like those offered by Amazon or Google.” The CSM token, Crust’s native cryptocurrency, is used as a means of payment to nodes “for providing storage resources and for staking to participate in the governance of the platform, among other things.”
Moonriver (MOVR) – A smart contract blockchain that “supports Ethereum decentralized applications, Moonriver is intended to operate on Kusama as a parachain and provide a full EVM implementation, a Web3-compatible API and bridges that connect Moonriver to existing Ethereum networks.” Moonriver also plans “to implement a built-in integration for all Kusama and ERC-20 tokens and bridges to other assets like Bitcoin.”
Khala (PHA) – Phala Network is a Kusama parachain that “tackles the issue of trust in cloud computing.” It aims “to enable cloud processing without sacrificing data confidentiality. Phala Network’s distributed computing cloud is versatile, scalable and confidential, utilizing privacy technology already embedded in modern computers.” PHA, Khala’s native cryptocurrency, is “used to secure the network and holders can use it to participate in the protocol’s governance mechanism.”
Rewards for supporting parachain projects “vary per project.” You may check out Kraken’s Support Center article for a breakdown of the “potential rewards per KSM contributed, percentage of tokens issued to parachain auction contributors, campaign durations, token vesting schedules and more.” The Support Center will “only reflect information on currently supported projects.”
You may start contributing now, but note that only verified Intermediate accounts and higher are “eligible to participate in the Parachain Auctions.” If your KSM is being staked on the Kusama network, you will need “to unstake it before you can use it to participate in a parachain auction.”
The KSM you contribute to support a parachain auction bid is locked, “meaning it will be unavailable for trading, staking, withdrawal, or use in other parachain auction bids.”
This will be “true for the duration of the project’s auction campaign, including further attempts at parachain slot auctions,” Kraken clarified while noting that if the project wins, your KSM will be “locked for the duration of the parachain slot acquired (which may be up to 48 weeks).” At the end of this period, bonded KSM will be “unlocked and Kraken will aim to promptly return it to your account,” the announcement noted.
For more information about this offer, check here.