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OKEx Intelligence Agency: Kusama parallel chain auction is about to start, in-depth interpretation of the parallel chain auction strategy

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Just as distance tests the horsepower, time shows the heart. Let's wait and see.

Title of the original article: OKEx Intelligence Agency: Kusama Parallel Chain Auction, Deep Interpretation of Various Parallel Chain Auction Strategies

Original source: OKEx Intelligence Agency

We are looking forward to the parallel chain auction of Kusama for more than half a year. The final auction plan is likely to be announced at today's Polkadot Decoded Conference. So as the holder of KSM tokens, which parallel chains should be focused on? And how to calculate the final return? What is the bidding strategy of each parallel chain project party? Today I'm going to share these questions.

The Polkadot deCODE community online conference will begin on May 19 at 21:45 Beijing time and will likely announce the details of the development of the Kusama parallel chain. Gavin will hold a friendly "pub chat" with Aeon Buchanan and Alistair Stewart on May 20 at 3:30 PM (Beijing time), and may announce the details of the Kusama parallel chain auction himself.

币世界-欧易 OKEx 情报局：Kusama 平行链开拍在即，深度解读各平行链竞拍策略

Kusama releases slots in the form of Auction. Most parallel chain teams choose to crowdfund their slot leases using the built-in Crowdloan mechanism of Kusama, so that investors can support parallel chains with their own KSM in order to receive the tokens of parallel chains.

So what crowdsourcing assets should we focus on? What are the characteristics of these parallel chain projects? And what kind of incentives will they offer for this crowd lending? The author enumerated six parallel chains here, namely Acala, Kilt, Bifrost, Crust and Phala.

1. Parallel chains that need attention

1) Acala Network

Project Introduction:

Acala is the world's first decentralized open finance alliance, the Boca Polkadot Ecofinance Center, which aims to create an open finance framework in conjunction with the Boca Polkadot Ecosystem to bring financial stability, liquidity and accessibility to crypto assets around the world. Core Layer 1 modules such as the Stablecoin Honzon protocol for cross-chain multi-asset mortgage, the Protocol for releasing Staking asset liquidity HOMA, and decentralized exchange have been launched.

Project Features:

Acala is the Defi Hub of the Boca ecosystem and the infrastructure equivalent of the Defi domain. It mainly consists of several major modules: the first is a decentralized over-collateralized stablecoin (AUSD) system, which is equivalent to the Maker DAO of Boca Ecology for over-collateralized stablecoin issuance;

The second is decentralized asset swap, an automatic market maker based on AMM mechanism, which is equivalent to Uniswap providing DEX function for Boca ecology.

Third, Staking is liquidity. With Staking, users would be able to exchange tokens they pledge on the backbone for intermediate tokens (L-KSM/L-DOT) into circulation, improving capital utilization.

Auction strategy:

A) Token information

Main Network: ACALA Network (ACA), with a total ACA of 1 billion;

Advance Network: Karula Network (KAR), the total amount of KAR is 100 million;

B) Auction strategy

The Karula auction will award around 11% of the total amount of KAR. The user can understand this as "Paradrop", assuming that 100 KSM is locked, at least 1200 KAR will be obtained, and if it is 1:12 for a year (at least), at least it means that there may be more. 30% will be released immediately after the network is launched, and the remaining 70% will be released linearly one block by one according to the lockup period of this year.

2) Plasm Network

Project Introduction:

This is a parallel chain of multi-virtual machine, extensible and interoperable smart contract based on Polkadot. June supports two layer expansion contracts including Optimistic Rollups and ZK Rollups and is compatible with both Ethereum Solidity smart contract and WASM smart contract. In addition, it is also developing heterogeneous chain cross-link Bridges to the ecology including Ethereum, Cosmos and so on. There is a unique DApp Staking and Operator Trading mechanism that allows the developer to make a profit on the development and to sell the operation rights to his or her contract; Community members can keep making money by dappstaking.

Project Features:

First, refers to the earliest intelligent contract platform in the Polkadot ecosystem that implements EVM+ WISM multiple virtual machines, that is, existing projects based on Solidity smart contracts and emerging projects based on WISM smart contracts can be migrated/deployed on this platform directly.

Second, it is the only project in the Polkadot ecosystem that supports Layer 2. However, we believe that more projects will be realized in the medium term.

Thirdly, there are unique DApp Staking and Operator Trading mechanisms that are the most innovative and innovative. This would allow developers to generate income through development on basis, and community members to share dividends through DApp Staking. Developers will also be able to sell the right to run smart contracts on the chain.

Auction strategy:

A) Token information

Main Network: Network Work&NBSP;

Xieden Network: Shiden Network, with a total issuance of 45 million, SDN and PLM 1:1.

B) Auction strategy

It plans to reserve 30% of the total SDN supply for Kusama card slot auctions. For the first card slot auction with a 48-week lease period, 15% of the total amount of SDN tokens will be offered, that is, 6.75 million SDN tokens will be returned to KSM users who support the Shiden auction.

3) the Kilt Protocol

Project Introduction:

Kkilt's open source blockchain protocol makes it possible to describe and prove any type of characteristics of individuals, organizations or even things in a standardized manner. It is used to publish declaration-based verifiable, revocable, anonymous credentials in Web 3.0, providing user data sovereignty and interoperability for applications. Kkilt has the potential to build a new business model around trust.

Project Features:

KILT Protocol: The KILT project focuses on providing identity authentication in a distributed way. And the identity authentication function is the large-scale financial application must have the condition. The current Defi app, while popular, is still a financial transaction between anonymous users. Therefore, it is impossible to promote the application on a large scale. The project of KILT can provide the identity authentication of participants in a distributed way, and the identity authentication is more granular than the authentication in the existing physical entity. Therefore, KILT will be widely adopted. Clearly the market has a clear sense of this, and has therefore begun to support Kkilt as a parallel chain in the Boca ecosystem.

Auction strategy:

The Kilt Protocol has not yet given a detailed bidding strategy. Earlier on February 16th, CEO and founder of Kkilt Protocol, Ingo Rube, shared their plans for the next few months, referring to their auction plans, but not detailing the rewards.

4) the Bifrost Finance

Project Introduction:

Bifrost is a Poca Ecological DEFI Base Protocol that is committed to being a liquidity infrastructure for pledged assets. Bifrost is currently rolling out a derivative VToken for Staking and Poca parallel chain card slots (PLO).

Project features:

First, the launch of the first liquid derivative: Veth in the fourth quarter of 2020. Veth is designed for participating Ethereum 2.0 users. Owning Veth is equal to participating in Ethereum 2.0 pledge and receiving benefits, and can trade or participate in the DEFI application at any time during the lockup period. Until now, a total of 17,788ETH of VETH has been accumulated through two phases of VETH aircasting, which is equivalent to generating a total market value of $27M of locked warehouse. After the parallel chain is connected, a universal liquid derivative, VToken, will be launched. It can be compatible with most of the POS public chains and will continue to operate according to the developed logic and token economic model.

Second, during parallel chain auctions, SALP (card slot auction liquidity agreement) is introduced to address the opportunity cost of participating in parallel chain pledging.

How does SALP work? After participating in the Kusama parallel chain auction through Bifrost, the user can obtain the two assets of VSKSM and VSBOND through SALP protocol. VSKSM represents the KSM token pledged in the parallel chain slot and can be traded at any time with VSKSM. It can be traded in DEX and CEX in the future. Vsbond represents the interest attached to participating in parallel chain auctions.

How is the VSKSM price guaranteed? One might argue that SALP is, in effect, leveraged, and that it would cause the asset, VSKSM, to fall sharply. It doesn't. As we know, there will be a redemption period for each VSbond issued in parallel chain. After the expiration, you can redeem KSM one for one as long as you hold VSKSM and VSbond. In other words, as long as you buy VSKSM in the market at a lower price, when your VSbond expires, Therefore, the SALP agreement, on the one hand, is a risk hedging tool for investors participating in the slot; on the other hand, it can actually increase the number of locked positions of KSM and DOT in the whole parallel chain slot in the process of horizontal auction, giving the whole Boca ecology more gameplay. Bifrost was the first parallel chain to use the SALP protocol.

Auction strategy:

A) Token information

16.2 million (10 years later), 5 million in current circulation

B) Auction strategy

Antecedent network

1 KSM: X BNC Award (X will be announced at the beginning of the formal phase with a ratio greater than at least 1 KSM: 10 BNC).

5) Crust Network

Project Introduction:

Crust provides a decentralized storage network for the Web3 ecosystem, supporting multiple storage layer protocols, including IPFS, and providing an interface to the application layer. Crust's technology stack also supports a decentralized computing layer. Crust aims to build a distributed cloud ecosystem that values data privacy and ownership.

Project Features:

First, off-chain data storage. Some blockchain-based applications, such as NFT and decentralized social platforms, involve a large amount of user data, and the storage capacity on the chain cannot support such huge data. Developers can integrate Crust for decentralized blockchain full-node data storage solutions based on the Crust/IPFS network.

Second, P2P content distribution networks. Under the crust-layer protocol, the nodes in the crust-network spontaneously spread CDN files across the network and assumed the role of edge nodes, leading to faster data transmission. Users can use the Crust to provide content distribution and acceleration for a number of decentralized videos, social media sites, software and personal private sharing.

Third, decentralize website and dApp deployment. Developers can deploy their own dApps and websites based on the Crust/IPFS network. Developers only need to focus on the construction of dApps and websites without having to manage any servers, with high availability, high security and low cost. Uniswap and PolkaApps' site deployments have now moved to Crust. In the next phase Crust hopes to deploy more sites through Crust's decentralized deployment.

Auction strategy:

A) Token information

B) Auction strategy

Antector Shadow shares tokens with Main.

KSM contributors will be rewarded in the form of CRU airdrop, with a tentative ratio of 1:0.07 per week. Contributors will receive 7 CRUs per 100 KSMs per week, and the award will continue until the set time for crowdfunding ends or the auction is won.

Crust has set aside 40 percent of community development tokens for events related to the Parallel Chain Slot Auction. That number is about 2 million CRUs. The 2 million CRU will not be used up all at once, it will include auction incentives, possible purchase of DOT, future lease maintenance and much more.

6) Phala

Project Introduction:

Phala Network is a permission-free and trustless privacy computing cloud. Phala is built on Substrate and operates as a parallel chain to the Poca ecosystem to provide computing power comparable to existing cloud services and to protect the privacy of hosted applications. Based on Phala's tee-blockchain hybrid architecture, developers can easily deploy and run Phala secret smart contracts within the CPU's TEE area.

Project Features:

Phala Network makes use of Polkadot's cross-chain capability to become the data security layer for other blockchain applications, such as DEFI trading positions, transaction history confidentiality, DID private data joint calculation, and light node cross-chain bridge. Phala's high-performance contracts make it possible to build a private computing cloud that provides trustless Serverless computing services for high-concurrency, big data analytics. Cloud products in development include Web3 Analytics, a decentralized Google Analytics replacement.

Auction strategy:

A) Token information

Phala Network, PHA, with a total circulation of 1 billion

B) Auction strategy

KSM:PHA =1:100. The upper limit of the PHA reward pool is 15 million PHA, which means that supporters will no longer be rewarded after PHALA reaches 150,000 KSM support.

2. How to interpret the bidding strategy of each parallel chain?

In the case of Crust Shadow, we know that KSM contributors are paid out in the form of CRU airdrops, with a tentative ratio of 1:0.07 per week. Contributors will receive 7 CRUs per 100 KSMs per week, and the award will continue until the set time for crowdfunding ends or the auction is won.

So what's the annualized return?

Currently the CRU token is priced at $66 and the KSM token is priced at $530. Let's assume that at the moment Crust Shadow gets the parallel chain, CRU is priced at $70 and KSM is priced at $600. Crust Shadow participated in the Poca slot bidding in the first round and officially won the parallel chain slot in the sixth round. You bid for 100 KSMs to support the Crust Shadow slot.

币世界-欧易 OKEx 情报局：Kusama 平行链开拍在即，深度解读各平行链竞拍策略

So, what is your annualized return on your 100 KSM tokens?

Calculate how much profit you can get if you pledge 100 KSMs from the beginning: 100*0.07*5*6*70= $14,700. Annual return: 14700/60000*11*100=269.5%& NBSP;

If the CRU price rises to $140, the annualized return will be as high as 269.5%*2=539%, and it will be almost risk-free.

The following will be the most important parallel chains summed up to this point, you can according to the above calculation method, and then combined with the characteristics of different parallel chains, a suitable combination of their own bidding strategy.