LJ Articles| 6/09/2021 | #13

Polkadot Vs Kusama Auctions

by Lorimer Jenkins, y.at/βŒ›πŸš€πŸ’ŽπŸ™Œ

I feel most people in the future will think of Polkadot and Kusama as funding rounds to get into the Crypto space.

What is a parachain auction

During a parachain auction, DOT or KSM holders can bond their cryptocurrency to support the project that they believe should receive a parachain slot. In return, the project may commit to airdrop tokens (or provide other rewards) to their supporters.

Why are Polkadot and Kusama auctions special

  • An extremely large amount of KSM / DOT is locked up allowing the team to have a safe layer underneath their token.
  • No funds can buy beforehand, it’s a no brainer. No pesky hedge funds or whales to pump and dump the price months before it is very much an even playing field.
  • Only a small amount is released on the first day, a vesting schedule provides scarcity on release so everyone is locked in and the market becomes less volatile.

These allow the projects coin to have a extremely good kick start in the Crypto ecosystem.

Difference between Polkadot and Kusama auctions

Imagine if you were a Crypto fund and you wanted to make the most money. Would you rather invest in a seed round or a B round.

Seed round right ? Maximum money for the shortest time. Well then Kusama is the equivalent for a seed round, as it’s testing projects before they go on Kusama.

So theoretically in an ideal world you would lock up KSM on a project. That project would then give you tokens. That project then finishes its lease on Kusama. The project then goes and launches on Polkadot. And you have made a fair percentage return.

Kusama is just the asset that gives you access to Crypto seed rounds ;)

by Lorimer Jenkins


Disclaimer : I am not a financial advisor these articles for education purposes, new articles released by 12pm BST every day.