OEC OKEx Observation: Deep Analysis of Poca Parallel Chain Slot Auction, What Does It Mean for DOT and Ecology?

OEC OKEx Observations: An In-depth Analysis of Boca Parallel Chain Slot Auction, What Does It Mean for DOT and Ecology?

Original source: OE OKEx

December 23, 2020, Boca co-founder Robert& NBSP; In an official release from Polkaworld, Rococo V1, Poca's proprietary parallel chain test network, is up and running, allowing community parallel chains to connect to the relay chain via Cumulus. On January 12, Bruno Skvorc, a member of the Web3 Foundation for Technology Education, tweeted a document on the Rococo V1 parallel link test registration site (Polkadot Wiki). Rococo V1 is expected to open parallel link test qualification registration in the coming days.

Note: Rococo is a public test network designed to test parallel chain functionality, launched by Poca in August 2020. It is maintained by Parity Technologies and the Polkadot developer community.

With the release of the Rococo V1 Test Network, it means Kusama and Polkadot   Parallel chain slot auction and on-line will gradually open the curtain. As of January 10, the Boca token DOT has risen by 97% in a month, ranking the sixth in market value above BCH and ADA.

So what does the parallel chain slot auction mean for Poca? How can project parties and ordinary users participate in Boca Eco? What impact will it have on the future of DOT?

1. What is parallel chain slot auction?

Before you understand parallel chain slot auctions, you need to understand the architecture of Poca.

Boca is a scalable heterogeneous multi-chain blockchain. Cross-chain is its core vision. To achieve this goal, Boca consists of relay chains, parallel chains, and transition Bridges. RelayChain is a block chain based on Substrate, which acts as the center of Poka network and is responsible for the verification of information interaction, protection and coordination of parallel chains, and maintenance of the security of the entire network. Parallel chain (Parachain) runs through slot access to the relay chain, and interacts with the relay chain, and is responsible for handling various "trivia". Different parallel chains can focus on different businesses and serve different needs.

Parachain Slots, on the other hand, is the interface between the relay chain and the parallel chain. In order to share the security of Poka network, business interaction with other parallel chains must be realized through slots. The slots are divided into Community Beta Slots and Commercial Slots. 20% of the slots are reserved for Web3 Foundation to deploy and support, as a community testing parallel chain to promote the development of the whole Boca ecosystem. The remaining 80 percent of the slots will be commercial slots, which will be opened by auction.

Because the operation of parallel chains needs to consume a certain amount of network computing resources, in order to ensure network efficiency and security, the number of parallel chains is limited at the initial stage. Boca founder Gavin Wood said at the Boca China Tour event in July 2020 that the maximum number of parallel chains will be around 100, which means that the maximum number of slots that can be run simultaneously will also be around 100.

To ensure fair distribution, Boca designed an auction that allowed the project's owners to bid for the right to use slots. The right to use means that the slots are rented but not sold, and the project parties have to bid for the right to use by locking in a certain amount of DOT for a certain amount of time. At the end of the rental period, the locked DOT will be unlocked and returned. (Note: DOT that has participated in mining pledge cannot be used to participate in auction lock at the same time)

No fixed date has been announced as to when the slot auction will take place, but Gavin Wood has previously said it will take place early this year. Based on the current development progress, Rococo Parallel Chain Test Network will need at least a period of stable operation before it is considered to start online slot auction. According to Gavin Wood's introduction on December 8 last year, after the stable operation of Rococo V1 test network, it will be the first to open the parallel chain slot bidding on the test network Kusama, and the winning parallel chain bidding on the Kusama online. This process is then replicated on the Boca mainnet. So from a process point of view, parallel chain slot auctions are one step closer. (Note that Poka needs to use Dot and Kusama needs to use KSM to participate.)

2. How to bid for slots and how to participate?

Boca's slot auction is new and relatively fair.

In order to reduce auction sniping, POKA parallel chain slots will be conducted by "candle auction", with some improvements on the traditional candle auction and the use of a backtracking closing mechanism.

Candle auctions originated in the sale of ships in the 16th century and took their name from the "one-inch candle" that determined when the auction would be open. When the candle flame goes out, the auction ends abruptly, and the current bidder wins. When candle auctions are used on the web, a random number is required to determine the end time. Parallel chain slot auctions are slightly improved on regular candle auctions in that they have a known opening phase, and at the end of the auction, a random past block is counted, which is the actual closing time of the auction. But the retroactive blocks are done after the entire process has been completed, so no one knows when the auction will end.

To sum up, the candle auction means that everyone knows the status of the auction, but not when it will be over, which helps ensure that bidders are more willing to bid sooner rather than later. There are two stages in the Boca parallel chain slot auction process: safe period and random period. Dot can be freely pledged in both phases, and the auction stops abruptly at an unpredictable point in the random period. Bidders before this point are awarded to the highest bidder. Bidders therefore need to bid early, pledging as many chips as possible before the second stage.

Auctions of parallel chain slots are held every six months and only one slot is released at a time. The lease term of the slot is 6 months, divided into 6 months, 12 months, 18 months and 24 months. The project participating in the auction can bid freely. The one bidding for a single or adjacent lease term will win the highest price. The winning bidder needs to lock (pledge) his DOT for a specified period and the deposit will be refunded at the end of the parallel chain lease.

If the project party lacks funds, it can go from PLO (Parachain Lease Offers, Gavin called it Crowdloan) to Web3 Foundation to create a parallel chain. For example, through a series of incentives to attract investors to lock in their DOT to them, in turn, investors can lock in their DOT support in the auction module. If the auction fails to become a parallel chain, the subsequent can also be connected to the relay chain through the way of parallel threads.

This gives ordinary investors the opportunity to participate, if you like a project, or support a project, you can lock your DOT to help them bid. It is important to note that these DOTs are locked in Polkadot's relay chain, not directly into the hands of the project parties, and will be returned in full afterwards. The DOT will be refunded after a lock-up period (possibly six months to two years) if your bid is successful, and soon after the auction closes if the bid is unsuccessful.

3. Significance of parallel chain slot auction

So why is there so much focus on the slot auction, the project parties are actively preparing, and what does the parallel chain slot auction mean for Boca, the project parties, and the investors?

1) VS. Boca

As a representative of cross-chain projects, Poca has been called a blockchain project comparable to Ethereum. The parallel chain slot auction is an important milestone in Boca's roadmap. It is also the "big deal" for Boca this year, which means that its cross-chain vision will begin to be realized.

Gavin Wood has said that one of Poca's biggest goals in the future is to build a chain bridge with other blockchains. The current blockchain world is more like a data island. If Poka can bridge Ethereum, Bitcoin and other mainstream blockchains through the transfer bridge, then the communication and interoperability of data and assets between different blockchains will be realized in the future. This will have huge implications for the Boca ecosystem, and for the blockchain ecosystem as a whole.

At the same time, for Poca token DOT, slot auction can enrich the use of DOT scenarios. Since parallel chain slot auctions and investors need to pledge DOT to support their favorite projects, the total locking rate and locking structure of the DOT network will be affected.

When the Parallel Chain Slot Auction is launched, a large amount of DOT is required to participate in the bidding, and some of the pledged DOTs are unlocked. As more parallel chains are released, the total DOT lock rate (node pledge + auction lock) is expected to increase across the network. From this perspective, an increase in the total lock-in rate is expected to have a positive impact on the secondary market performance of DOT (as is the case with KSM), but the exact price of the currency will need to be judged in the context of the current market environment.

2) To the project party

Successfully capturing the slot as a Poka parallel chain will be able to share Poka network consensus and security, and will be able to achieve business sharing and interaction in their different lines of business at the same time, which is a great advantage for the project parties. Bidding for the first batch of slots will bring a certain first-mover advantage to the project, which can promote the planned development work as soon as possible, and is conducive to its later ecological construction. At the same time, it is also a high-profile publicity, conducive to the project momentum

It will take some time for parallel threads to be developed, and many projects that are interested in building within the Boca Eco will try slot bidding before they are launched. (Light-weight projects that do not require transactions to be processed in every block are more economically suited to parallel threads that are paid on demand.)

According to the PolkaProject, 333 Poka ecological projects have been built, and 106 have been built based on Substrate. The Parallel Chain Slot Auction has not yet started, and many well-known and representative projects are ready to participate in the Parallel Chain Slot Auction, such as Acala, Phala, Chainx, Darwinia, Bifrost, Stafi, Litentry, etc.

3) To investors

The PLO scheme designed by the parallel chain slot auction provides market investors with a way and opportunity to participate in Poka Ecology. By selecting the project to pledge DOT in the auction module, investors can help the project to participate in the auction. At the same time, you can also get some tokens or other incentives for the project, which may be more imaginative than the NPOS pledge revenue.

At present, exchanges, investment institutions and secondary market investors are paying great attention to the development process of Boca, supporting and optimistic about its ecological development, and regard it as an opportunity worthy of attention. Many of the investment institutions that have laid out the Poka Ecology have expressed their intention to participate in the auction, which will help the projects that have been invested in the auction slot, which can indirectly obtain greater interests.

And the mainstream trading platform will also Boca as one of the key layout, have set up Boca ecological fund, and give investors to participate in the Boca ecology to provide a convenient channel. On December 30, OKEx announced that in order to support the Boca community and ecological co-construction, it officially launched the DOT Pledge Mining Service. Users can pledge DOT with one button in the "Earning coins" area to receive the daily mining income. The minimum number of participation is 1DOT, and the expected annual income is 12.8%. In addition, OKEx also established Block Dream Fund to enable global high-quality blockchain projects, with an initial capital of $100 million, which will focus on investing in blockchain infrastructure, Poka Ecology, Defi, and Okexchain Ecology.

There is no doubt that these important participation roles represented by trading platforms and investment institutions will contribute to the construction and development of Boca Ecology.

In 2021, the Boca and Parallel Chain Slot Auction entered the public domain, and the prices of DOT and KSM continued to rise. According to OKEx, Dot is now quoted at 39.77USD, while KSM is now quoted at 589.60USD.

Image credit: OEEE OKEX

As far as the macro vision of Boca is concerned, the landing of parallel chain is only one of the key nodes in its development process. There is still a long way to go for its future development. Let's wait and see.

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