As the Polkadot community celebrates two weeks since the launch of parachain slot auctions on Kusama, several crowdloan projects have raised upwards of $200 million in KSM (the native token of Kusama).
Polkadot, a platform on which blockchain networks are built and connected into one unified network, has positioned itself as a viable alternative to the Ethereum network. Ecosystems built for Polkadot and Kusama employ a dev framework called Substrate, an advanced blockchain-building framework for developers. (See Bitcoin stock comparison on TipRanks)
Although Polkadot and Kusama enable a multi-chain ecosystem of interconnected parachains, not every project can join the ecosystem. Interested projects must win a candle auction, called a “parachain slot auction,” using DOT or KSM tokens, to occupy a parachain slot on either platform. Tokens for these auctions can be gathered in a variety of ways, such as self-funding, venture capital, or a community-sourced “crowdloan.”
The auction, that just wrapped on Kusama, has attracted several promising projects, including Robonomics, Phala, KILT, Bifrost, among several others. Thanks to an array of features, including user-driven network governance, ease of development, and the ability to interoperate with a wide variety of blockchains, Polkadot has garnered massive support from the community, cementing itself as the blockchain of the future.
Since Polkadot is a 100% open-source project, anyone can contribute to the codebase, run a node, or build services on Polkadot. The platform also offers grants via the Web3 Foundation General Grants Program. There are many ways to engage with the global Polkadot community, which helps foster a close-knit community that works in perfect sync. Besides, Polkadot uses a sophisticated system of governance in which all DOT holders have a say, making the platform highly community-centric.
Owing to the high scalability, transactional stability, and unprecedented interoperability of Polkadot and Kusama, leading projects, such as MoonBeam and Acala, are raising KSM tokens via crowdloan to bid in the upcoming parachain slot auctions. The first auction on Kusama has garnered substantial community support.
Hosted by the Moonbeam Foundation, the crowdloan to launch Moonriver Network on Kusama has already raised 101,547.9879 KSM at last count from 4,281 contributors. Likewise, Acala is also hosting a crowdloan event to raise KSM for its Karura parachain auction. Karura, which won the auction with over 500K KSM that were then locked for 48 weeks, aims to be the DeFi hub of Kusama. Other projects, including Bitfrost, Khala Network, Shiden, Mars, Genshiro, Crust Shadow, and others, have also raised more than 100,000 KSM in total.
With limited slots and several promising projects competing to win a two-year lease on the parachain, projects that have the backing of the KSM-holding community will have higher chances of leveraging the Polkadot and Kusama networks. Importantly though, these developments highlight the powerful momentum of Polkadot’s ideals and eagerness to adopt the Kusama canary network.
With many chains vying to displace Ethereum as the preeminent hub for dApps and DeFi, Polkadot’s community support could place it as a forerunner to challenge Ethereum’s dominance in these areas, especially given the financial backing these new projects are collecting.
Disclosure: Reuben Jackson held no position in any of the companies mentioned in this article, at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.