LJ Articles| 6/09/2021 | #13
Polkadot Vs Kusama Auctions
by Lorimer Jenkins, y.at/⌛🚀💎🙌
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.