What Are Polkadot’s Parachain Auctions?

Key Takeaways

  • The Polkadot ecosystem will host projects on individual networks called parachains.
  • The first Polkadot parachain auction is set to begin Nov. 11.
  • Acala, Moonriver, and Phala are three standout projects hoping to launch on Polkadot.

Share this article

The Polkadot ecosystem is preparing for one of its biggest events to date: the launch of parachain auctions. 

Polkadot Prepares for Parachain Auctions 

Layer 1 smart contract platforms like Solana, Avalanche, and Cardano have exploded in recent months. Polkadot is a similar network with big potential, but it takes a different approach to other Layer 1 blockchains by allowing for multiple chains known as parachains to be built onto the Polkadot network. Polkadot’s founder Gavin Wood touts the network as “a bet against blockchain maximalism.” 

The Polkadot network is comprised of a core relay chain to which several parachains connect. Each parachain acts a separate blockchain but comes with built-in interoperability with all other parachains on Polkadot. Parachain slots are limited, so competition is fierce over which projects will be able to secure them through the parachain auctions.  

The upcoming parachain auctions are a key steps towards Polkadot achieving its mission to become a scalable multi-chain network. This feature explores parachain auctions and some of the most prominent projects that could be joining the network in the coming months. 

What Is Polkadot?

Polkadot’s name itself goes some way to explaining how the project works. The Polkadot network can be thought of as an array of circles on a canvas, where each circle represents a different project. Polkadot is the base layer each project is built on. Projects that connect to Polkadot will be interoperable with one another, and every parachain will leverage the security of the Polkadot network while maintaining its own governance structure. Additionally, Polkadot says it is “future-proof” because it can upgrade without hardforks (other similar blockchains like Ethereum regularly complete hardforks for major upgrades). 

Polkadot’s Relay Chain launched its mainnet in May 2020, and its DOT token is currently the eighth largest cryptocurrency by market capitalization. Prior to launching Polkadot, Wood played a major role in the development of Ethereum and Solidity, the programming language for apps that run on Ethereum. He went on to set up the Web3 Foundation and Parity Technologies, the teams behind Polkadot, Kusama, and the Substrate programming language. 

Polkadot is frequently described as an “Ethereum killer,” though Wood has previously disagreed with this characterization. He recently said that just as one should not bill Microsoft as a Chrysler killer, one should not bill Polkadot as an Ethereum killer. 

Polkadot has four main components: the Relay Chain, parachains, parathreads, and bridges. The Relay Chain can be thought of as Polkadot’s heart. Parachains connect to it when they join the network. The Relay Chain itself does not support smart contracts and it only handles a small number of transaction types such as staking.

The slots parachains connect to are similar to cores on a computer processor. Bridges, meanwhile, connect parachains and parathreads to external networks such as Ethereum. Parachains are individual blockchains. Parachain auction winners can lease a slot for up to two years. Parathreads, meanwhile, allot eligibility for up to six months on a pay-as-you-go basis.  

To achieve consensus, Polkadot needs to fill four roles: nominators, validators, collators, and fishermen. Nominators stake DOT to validators they deem as trustworthy in order to secure the relay chain. Validators also make sure that every parachain “state” sent by collators is correct. Collators maintain parachains and participate in consensus. Fishermen report bad behavior to validators; the role can be filled by both collators and parachain nodes. 

What Are Parachain Auctions?

The parachain slot auction process was initially tested on Kusama, Polkadot’s Canary Network. On Oct. 13, the Polkadot community approved a proposal to launch parachain auctions. They’re set to commence Nov. 11, with an initial 11 slots due to be auctioned. Eventually, Polkadot is expected to host 100 parachains in total. 

The first 11 auctions will be split into two batches: the first batch will be auctioned weekly from Nov. 11, while the second batch will be auctioned fortnightly from Dec. 23. Each auction will last seven days. 

The auctions will adopt a modified version of the candle auction format. The winner of each auction will be determined by which project has the most DOT backing it at a randomly selected point. Polkadot will use this methodology to prevent last-minute bidding wars. Parachain auctions can reward leases of up to two years, while leases up to six months are available for parathreads. 

Initial Parachain Offerings

Many different types of projects can run on a parachain. These include DeFi applications, digital wallets, Internet of Things applications, GameFi projects, and Web 3.0 infrastructure. 

As the winning parachain slots go to projects with the highest DOT contribution at the end of the auction, many projects are unable to contribute enough DOT to secure a slot. This is where crowdloans come in. 

The so-called “Initial Parachain Offering” (a play on Initial Public Offering for equities) allows DOT holders to contribute funds to a project they want to support, as long as they live in a region that is not restricted from participating in the crowdloan. Many crowdloans have already taken place on Kusama, with hundreds of projects hoping to integrate onto the Polkadot network. It is worth noting that the Web3 foundation could potentially influence the projects that win slots through grants or DOT contributions—it’s already funded several Polkadot projects.   

Some projects have adopted strategies such as rewarding DOT contributors through airdrops. Any DOT contributed to a project for an auction gets locked until the lease expires. At that point, the project has the option to enter a new auction to win the slot again. 

It is worth noting that Polkadot also has its own “Common Good Parachains.” Slots can be allocated if it is perceived to benefit the overall network, “without requiring a bond, in perpetuity.” Such slots might be filled by a sophisticated governance chain or bridges. 

Polkadot Projects to Watch

Many projects are currently being built in preparation for the full launch of the Polkadot ecosystem. Perhaps the most notable to date are Acala, Moonbeam, and Phala. 


Acala is aiming to become the go-to DeFi protocol for Polkadot. It’s scalable, optimized for DeFi and offers EVM compatibility. Acala’s key products include an automated market maker, a decentralized stablecoin, liquid DOT staking, and Ethereum interoperability. 

Acala was founded in 2019, and has many prominent backers including Coinbase Ventures and Pantera. One of its founders, Fuyao Jiang, built the Polkadot-focused mobile wallet Polkawallet. Moreover, it has received several grants from Gavin Wood’s Web3 Foundation. Acala’s sister network, Karura, won the first slot auction on Kusama after raising over 500,000 KSM tokens. Karura currently has roughly $280 million in total value locked. 

Acala will reward DOT contributors with ACA tokens, though full details on the distribution are still to be confirmed. 


Moonbeam is a decentralized smart contract platform that seeks to help integrate Polkadot parchains and connect them to other blockchains like Bitcoin and Ethereum. It bills itself as “the easiest path to multi-chain.” Moonbeam’s sister chain, Moonriver, won the second Kusama auction after raising 205,000 KSM. Dozens of existing projects are already building on Moonbeam, including Chainlink and SushiSwap.

Moonbeam’s native token is GLMR. 10% of the genesis GLMR supply is due to be allocated to crowdloan contributors, though registration to the crowdloan is limited to those in certain regions. 


Phala is a decentralized, privacy-preserving database that has smart contract functionality. Founded in 2018, it’s one of the earliest projects hoping to launch on Polkadot. Given the public, transparent nature of information on blockchains, Phala allows for confidential or sensitive data to be handled by the blockchain. As technologies like ring signature and zk-SNARKS focus on providing privacy for cryptocurrencies rather than smart contracts, Phala offers a unique use case, dubbing itself as the “Global Confidential Compute Cloud.” 

Phala’s PHA token is already tradable on open markets as an ERC-20 token. Like Acala and Moonbeam, Phala has a large community, which may be a sign that it will have significant crowdloan support in the upcoming parachain auctions. Phala has also received grants from the Web3 foundation. 

Parachain Auctions and the Future for Polkadot

It’s clear that many people are betting on the multi-chain, anti-maximalism world that Polkadot is hoping to bring: the DOT token has risen roughly 380% since its recent July lows. Parachain auctions could usher in a significant new phase for the ecosystem as it takes a step closer toward achieving interoperability. 

Disclaimer: At the time of writing, the author of this feature held DOT, ETH, BTC, and several other cryptocurrencies.

Share this article


Tagged : / / / / / / /

Polkadot Holders Are Backing Acala and Moonbeam for Parachains

Share this article

Moonbeam and Acala Network have raised a combined total of $885 million to bid in Polkadot’s upcoming Parachain auctions.

Polkadot Projects Await Parachain Auctions

Moonbeam and Acala Network look set for Polkadot’s parachain auctions.

Data from DotMarketCap shows that just under 100,000 Polkadot investors have collectively contributed $1.108 billion in DOT tokens toward the top 13 parachain candidates ahead of the first round of auctions going live tomorrow.

Acala Network and Moonbeam, two of the most popular projects in the Polkadot ecosystem, are currently leading the crowd loans race, and therefore look likely to secure slots during the upcoming auctions.

Polkadot plans to achieve interoperability by hosting multiple parachain networks. It plans to support 100 parachains. As the number it can host is limited, teams must bid in auctions to win a slot. The auction process involves staking DOT, which teams raise through crowdloans. In exchange for the loans, teams reward contributors with tokens.

According to DotMarketCap, Acala is the top parachain contender. So far, it’s raised 11.1 million DOT tokens worth $566 million. Moonbeam, meanwhile, has secured about 6.3 million DOT worth around $316 million.

Notably, both Acala and Moonbeam will be compatible with the Ethereum Virtual Machine. Moonbeam is a smart contract development platform building for the multi-chain future. Acala Network is developing a decentralized finance ecosystem including a stablecoin, staking derivatives, and a decentralized exchange.

Other projects that have raised significant amounts of DOT tokens include Astar, Parallel Finance, Clover Finance, and Manta Network. Per the auction schedule provided by Polkadot, five rounds are set to take place weekly between Nov. 11 and Dec. 16.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 

This news was brought to you by ANKR, our preferred DeFi Partner.

Share this article


Tagged : / / / / /

Polkadot Breaks New Highs, Kusama Surges on Parachain Developments

Key Takeaways

  • Polkadot is getting closer to its first parachain auction on Nov. 11.
  • Picasso has announced it is Kusama’s 12th auction winner.
  • DOT and KSM look primed for higher highs.

Share this article

Polkadot and Kusama’s vision of enabling multiple blockchain ecosystems or networks to communicate with each other is moving closer to becoming a reality. Polkadot is set to launch parachain auctions this month. 

Polkadot’s Parachain Auction on the Horizon 

Polkadot is making significant strides to make cross-chain interoperability a reality. 

In an unanimous vote, the community has passed a motion to enable parachain registration and crowdloans. Developers will be able to register their parachains and seek additional funding as soon as Nov. 4. 

However, the first parachain auctions are not set to begin until Nov. 11. The auctions are crucial to deciding which projects will be selected to receive the right to develop a parachain integrated on Polkdot’s blockchain. 

On the other hand, Kusama, the pre-production environment blockchain for Polkadot, has already conducted several parachain auctions. Composable Finance’s Picasso project secured a slot Monday, becoming the 12th auction winner. With the new resource, Composable Finance aims to deliver a comprehensive decentralized finance ecosystem for Polkadot. 

Picasso’s head of product, 0xbrainjar, said the project was launching on Kusama to “test out performance there, before opening up even further community development and participation opportunities.” Further details, including a detailed roadmap, will be released in the coming weeks.  

The recent developments around Polkadot and Kusama have not been unnoticed. Their native tokens, DOT and KSM, have enjoyed bullish price action over the last 36 hours, both gaining over 15% in market value. 

Now, the two assets appear to be preparing to advance higher.

DOT and KSM Break Out

Polkadot has entered price discovery mode after breaching its previous record high at $49.86. DOT appears ready to advance further despite the significant gains posted, especially if it can slice through the Tom DeMark (TD) Sequential indicator’s breakout line at $53.30. It’s currently trading at $52.21. 

The formation of a parallel channel on Polkadot’s daily chart prints a similarly optimistic outlook. Every time DOT has risen to this technical formation’s upper boundary since Jul. 20, the uptrend has reached exhaustion, leading the price to retrace to the pattern’s lower edge. From this point, the price tends to rebound, which is typical activity for an asset in a parallel channel.

As the recent upward impulse follows a rebound from the channel’s lower boundary, the technical formation suggests that Polkadot could surge toward the middle or upper trendline. These potential areas of resistance sit at $60 and $89. 

Polkadot must continue to trade above $41 for the bullish thesis to hold. Failing to do so could result in a brief correction to $35 or even $30. 

Polkadot US dollar price chart
Source: TradingView

Kusama could also be about to experience a significant upward impulse as it approaches the TD’s breakout line at $441. This crucial area of resistance has prevented KSM from advancing further several times since the beginning of September. A successful breach of this barrier could encourage sidelined investors to enter long positions in preparation for a significant price increase.

Under such unique circumstances, Kusama would likely target $512 first. If it overcomes this resistance wall, prices could rise further to retest the May 18 all-time high at $626.68. 

Kusama US dollar price chart
Source: TradingView

In the event of a market sell-off, the $384 support level or the 61.8% Fibonacci retracement level at $327 could prevent Kusama from incurring significant losses. 

Disclosure: At the time of writing, the author of this feature owned BTC and ETH.

Share this article


Tagged : / / / / / / /

Polkadot, Kusama Jump Ahead of Next Parachain Auction

Share this article

Polkadot and its canary network Kusama have rallied ahead of the second round of parachain auctions, which go live later today. 

The Polkadot Ecosystem Rallies 

Many Layer 1 blockchains soared in August, and now Polkadot is stealing the limelight.

Both Polkadot and Kusama, the two cornerstones of the Polkadot ecosystem, have put in significant gains ahead of the second round of parachain auctions. The DOT token has recovered from recent lows of $23.90 last week, rallying more than 25%. Kusama’s KSM token has done even better, soaring 50% over the past week before cooling off. They’re two of the crypto market’s biggest gainers of the last 24 hours, rising 16.4% and 28.4% respectively. 

Kusama chart Polkadot
Source: CoinGecko

The bidding for the first slot of the second round of parachain auctions will go live today at 11:00 UTC, allowing participants to back their favorite project using KSM tokens. 

Once allocated, the tokens will be locked up until one of two outcomes is reached. If the project wins the auction, KSM tokens will be bound to the project until the end of the one-year parachain lease, with contributors receiving additional native tokens from the project. On the other hand, if the project does not win the auction, KSM tokens will be returned to contributors. 

As KSM tokens are needed to back projects in the auctions, demand has soared. Similar activity was observed in June, with Kusama jumping 36% before the first round of parachain auctions. 

SIMETRI Research

Kilt protocol has already gathered over 200,000 KSM tokens, close to the 220,000 contribution threshold, and looks likely to win. The winner of the first auction will be announced on Sep. 8.

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies. 

Share this article


Tagged : / / / /

Shiden secures third parachain slot on Kusama

Shiden, the sister-project of leading Polkadot-native layer-two decentralized app hub, Astar Network (formerly Plasm Network), has won the third parachain auction for Polkadot’s experimental sister-network, Kusama.

Shiden secured the slot with a total of 137,020 KSM tokens bonded — worth nearly $29 million at current prices.

Shiden is a smart contract platform for Kusama-based DApps, offering multi-chain support for Ethereum Virtual Machine and WebAssembly-based contracts. The project also plans to deliver layer-two technology including Plasm and Optimistic rollups on Kusama.

Layer-twos have emerged as the dominant scaling solution for Ethereum, with co-founder Vitalik Buterin predicting rollups will scale the network by roughly 100 times and mitigate Ethereum’s scaling woes until sharding is introduced.

Parachain auctions allow projects to compete for one of Kusama’s 100 parachains, which are akin to sharded sidechains that interact with the network’s main “relay chain” to offer specialized execution and process transactions.

Auctions are conducted via a crowd loan, where projects’ followers agree to lock KSM toward their parachain bid in exchange for governance tokens.

Kusama’s parachains have so far gone to the canary networks of major Polkadot-based projects, with Acala Network’s Karura winning the first slot on June 22 with more than 500,000 KSM bonded — then valued at roughly $90 million. Moonriver won the second slot the following week with nearly 206,000 KSM bonded.

The coming parachain auction is expected to be closely contested, with Khala Network and Bifrost recently being separated by less than 3,000 KSM.

On June 29, Plasm rebranded to Astar Network, signifying the expansion of its focus from Polkadot-based layer-two technology to offer multi-chain support for EVM and WebAssembly.