Polkadot begin to garner serious momentum on February 20th when the trading volume spiked and this triggered the coin to reach an all-time high of $42.28. Only a day before, Polkadot was trading at a lowly $29.36 and its fortunes changed dramatically overnight, gaining an impressive 42%.
Industry experts say the growing excitement around Polkadot (DOT) is a result of the upcoming parachain auctions which will connect Polkadot with other major coins such as and .
The Proposed Parachain Auction
Massive enthusiasm is building in the Polkadot’s ecosystem because of the proposed parachain auctions. The parachain auctions will allow polka dot to be interconnected with other established coins in the blockchain.
For a parachain to succeed in the auction, it must occupy one of the available parachain slots. A slot is a very limited commodity and only a handful is available at any given point in time.
Polkadot’s goal is to have 100 slots which will be equally divided between the parachain and the part thread. These slots will be given out through an non permissioned candle auction.
Candle Auction – Old But Still Gold
A candle auction will be used to determine who gets a parachain slot on the network. Candle auctions are a version of the open auction model in which bidders submit buds that go higher in value and at the end, the bidder with the highest value gets the slot opportunity.
Originally used in the 16th century, candle auction’s etymology comes from the wick of a candle. The candle was lit and people placed bids that went higher after each bid and once the candle flame went out, it signifies the end of the auction.
Polkadot’s parachain slot will differ from the regular candle auction used in Blockchain because it will utilize an open phase that is retroactively determined to have ended in the past.
During the opening phase, bids will be accepted and bids in the opening phase will have a higher chance of being accepted than bids submitted in the closing phases.
The benefit of this version of candle auction in Blockchain technology is that it makes the process difficult to be targeted by auction sniping which makes bidders hesitant to unveil their true price early.
Asides from the candle auction, the only way to get hands-on a parachain slot are through a secondary market in which a party that has won the slot may resell it to another party.
On The Flipside
- Uberstate RIT 2.0 loses over 91% in massive price crash – Coinmarketcap.com
- The last 24 hours have seen the entire crypto-currency market drop by 4.60% according to figures by CoinMarketCap.
- Crypto-currencies are too volatile and prone to hackers, warns government regulatory agencies.
Polkadot, Ethereum’s Scion
Polkadot, developed by Parity Technologies is a multichain interchange and translation architecture that allows side chains to connect with public Blockchains.
Founded by Gavin Wood, former CTO at Ethereum, Polkadot has grown to become the 5th largest cryptocurrency with a total market capitalization of $33.45 billion and currently trades at $36.75 dollars.
With the parachain auctions around the corner, the excitement around the currency may drive up a strong price rally in the nearest future. Polkadot is at a decisive moment in its history and analysts are focusing a keen eye on how it will all play out.
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