Polkadot has finally announced the parachain slot auctions. This has been hotly anticipated for months ever since the slot auctions on Polkadot’s test net Kusama went smoothly over the spring and summer of this year. With the summer market slump in the rear-view mirror and fiat pouring into crypto now is the time to maximize hype surrounding Polkadot. The price action on DOT is indicative that the hype is real.
Parachain slot auctions have been long publicized so much of the price action today can be attributed to a speculative pump. Traders are capitalizing, but long-term the slot auctions are bullish for DOT since large amounts of the DOT token will be locked into the auction contracts. Polkadot is a serious project with long-term potential and will most likely be one of the top smart contract cryptos for years to come. Polkadot’s niche is both interoperability and DeFi. They want to be a layer 0 for Web3 connecting the various blockchains seamlessly like the Cosmos project.
The slot auctions were successfully launched on Kusama with the first slot going to Karura sponsored by Acala. They work closely and are sponsored by the Web3 foundation positioning them to take the first slot on Polkadot. Acala wants to lock participants DOT in a two-year contract. They may employ a liquid staking program similar to that seen with Karura where participants will be issued liquid Dot that can be converted back to DOT once the slot period completes receiving an equivalent amount of Acala’s token.
This process does involve a certain level of trust in both Polkadot’s and Acala’s long-term potential because it is not a fully “trustless” system. Additionally, any DOT locked up in these auctions will be off the market for any profit taking during this bull run. A secondary market will most likely emerge for liquid DOT as well.
Acala currently has a waitlist for cryptonauts interested in their project to gain additional token if you pledge, an early bird special. Look to Kusama for likely projects on Polkadot like Moonbeam-Moonriver, Bifrost, Khala/Phala, etc. The parachain auction is both a unique and dynamic IDO/ICO process combined with a long-term view to maintain Polkadot’s long term viability. Since there are only 100 slots currently available projects that bring benefit to the ecosystem will thrive and survive. Projects which don’t will be dropped. All in all this is all very bullish for Polkadot, a crypto project with serious potential.
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