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About Boca's slot auction, crowdlending, read this article is enough

Read this article in 35 Minutes

Shawn Tabrizi, Parity core developer and one of the developers of auction and crowd lending systems, talks about Poca parallel chain auctions, Crowloan, and slots.

The original title: "the latest | about wave card slot of the auction, all the credit, look at this one is enough"

Original source: PolkaWorld

At Polkadot Decoded, a community conference in Boca on May 19th, Parity core developer & NBSP, one of the developers of auction and crowd lending systems; Shawn Tabrizi Auction, Crowloan and slot of Boca parallel chain are introduced. This is PolkaWorld's excerpt from the presentation.

I think this article is probably the most recent, comprehensive, and easy to understand introduction to Boca Parallel Chain Slot Auction and Crowdloan to date. Although the article is long, it is recommended that anyone who is interested in the Boca and Kusama auction read it carefully.

1. Background introduction

Before we begin, I'll give you a little background on what Poca is and what it has to offer.

Boca: Creating a multi-chain future

The first thing to understand is that Boca's vision is to create a multi-chain future.

What exactly does that mean?

If we go back 10 years, Bitcoin was invented. It was the first public chain, and the only one that made sense at the time.

This went on for six years, until Ethereum went live. Ethereum provides a platform where multiple different teams can build their products on the blockchain. Ethereum is the beginning of a "multi-currency future" where people can launch their own tokens, create smart contracts, and allow smart contracts to interact with each other.

But we've seen firsthand that this architecture doesn't scale very well. If we look at the current blockchain landscape, there are a lot of teams that are building Layer 1 blockchains that have specific functions and want to solve specific problems.

This is where Boca comes in. Poca is a Layer 0 blockchain that connects Layer 1 solutions together, an innovation that has never been seen before. We believe that the future of Web3 will be many blockchains, and Poca is a platform that can facilitate and realize this vision.

Cold start problem

But the goal of "creating a multi-chain future" is not easy to achieve, and there is a cold start problem.

At present, the blockchain community is not quite large, and each Layer 1 blockchain is actually pulling people from the same pool to build a support system and win supporters for itself.

Each project needs to recruit node operators to ensure the security of its blockchain. And the chains themselves must struggle to interact with existing and even future blockchain systems. These problems are difficult to solve.

Shared security

Poka solves this resource problem by providing shared security for all parallel chains. That is, Poka itself will excise and collect the verifier nodes, which will be assigned to different parallel chains to verify their state transitions.

This means that when you join Poca Network, we can provide Bitcoin-level security for your chain at virtually no extra cost.

Cross link communications

And Poca also solves the problem of cross-chain communication and blockchain interoperability. The current blockchain is like the Wild West, where everyone designs their blockchain protocol on the back of a paper towel. Boca offers a clear, scalable, and extensible parallel chain standard.

So, with tools like XCM and XCMP, each parallel chain on Pokar can immediately communicate and interoperate with other parallel chains.

With Bridges between Bitcoin and Ethereum and the like, Poca will act as a gateway to all the information on a decentralized network.

The number of parallel chains is limited

Of course, as we all know, nothing is perfect. Unfortunately, even boka has its own resource limits. The process of adding a new parallel chain to a poka is itself an exponential scaling problem. So we can only give a finite number of parallel chain slots and run those parallel chains on the relay chain.

We do have a long-term plan to solve this scalability problem by using "Nested relaychains". You can imagine having a relay chain that's similar to Poka, but it's also connected to Poka as a parallel chain, so you can nest, you can continue to extend this decentralized network.

But those are plans for the future. In today's talk, we're going to talk about picking out those lucky parallel chains that connect to the Poca network.

2, slot

Slot is the term we use to describe the chance that a parallel chain can connect to a Poca.

Slot allocation

Optimistically, we think POCARD can support up to 100 parallel chains at a time, so we need 100 slots. Each slot is equal to the other.

About 10-30 slots are used for "parallel chains of the common good," which are chains for the entire Boca ecosystem. Like the bridge to Bitcoin or Ethereum. There are also useful chains, such as StateMint, which acts as a multi-asset parallel chain across the entire ecosystem. Some system level parallel chains, some logic will be spun off from the following chain, such as balance, Staking, governance, such as logic, we can take these things to the rid of the chains, and transferred to the parallel chains, to release the relay chain resources, good let relay chain can focus all his energy to parallel chain ecosystem services.

There are going to be 40-90 more slots that are going to be leased, that are going to be auctioned off, and that's going to be the focus of this talk, so I'll get to that later.

Slot on-line process

We're not going to have 100 slots overnight, instead, what we're going to do is gradually expand the network, introducing new slots and new parallel chains over time. Once we see that the network is stable, we can continue to open and expand new slots. But you need to know that this process doesn't happen overnight.

So the question becomes, how do we open up new slots? And that's where the auction comes in.

3, auction

The auction we're talking about at Boca is the parallel chain slot auction.

On Boca, each slot is two years long, divided into eight leases, each for three months. This means that in each auction, you can have up to 8 auction winners, each of whom gets a different period of time in those two years. Or it could be that a parallel chain offers a very high price and rents for the whole two years. In general, each auction offers two years of access to Boca, which you can bid on.

On Kusama, the lease term is shorter. Each slot is 48 weeks long, which is about a year, and each lease is only 6 weeks long. Of course, we made the slot cycle on Kusama faster because it's the canary network of Boca, so we wanted all of these parallel chain state transitions to happen faster to make sure everything went smoothly.

The candle auction

There are many ways to deal with the auction system, but we actually chose the candle auction system.

Candle auctions became popular in the 17th century as an alternative to the English auction. You may be familiar with the British auction, where everyone can bid more until at the end no one is willing to bid any more.

Candle auctions add a bit of randomness to the process. You can imagine that the auctioneer lights a candle and then begins the English auction process, where bids are made, but if at any point the candle goes out, the auction ends immediately, and no more bids are made, and the last bidder before the candle goes out wins the auction.

This means that no one knows for sure when the auction will be over, so bidders are encouraged to treat each bid as if it were their last. It would also encourage early detection of healthy prices, rather than last-minute sniping. Because if people suddenly bid very high at the last minute, it actually ruins the whole economics of auctions.

How to close the auction

If you know anything about blockchain, you will know that anything involving randomness is not easy. This is how we implement candle auctions on the blockchain.

We divided the auction into two parts:

In the first part, we have an Opening Period, which is a Period of time after the auction has begun, where the team can adjust, establish a preliminary strategy, make an initial bid, and see what the contenders are.

In the second part, we quickly move to the random Ending Period, in which the auction may end at any time and the winner of the auction is determined.

Here's how we manage randomness at random ends. We trawled through the random end period, taking a snapshot of each block in the random end period and finding the current winner for each block. We will keep these snapshots until the end of the random end period, and after the whole random end period has run out, we will use a verifiable random function to go back and select which snapshot is the actual end time of the auction to determine who is the real winner.

While there may be higher bids in the entire auction than the snapshot we selected, the snapshot we selected will determine who is the real winner.

The cost of an auction is simply an opportunity cost

One more caveat. That is, when you enter an auction, you bid with your DOT, but you don't actually spend the DOT, you just lock it up for the period of time that you rent the slot.

This means that at the end of the slot's lease period, you can get all the tokens you locked back, whether your parallel chain is to be withdrawn or you want to continue bidding later.

You can't make Staking, voting, or transferring money, etc., with tokens locked up. In other words, the only cost of being in a parallel chain is really just an opportunity cost.

So when you bid on parallel chains, you're saying that you can bring more value to yourself and your network than if you were Staking your coins for something like Staking. So the great thing about this is that you don't have to spend a penny.

Auction winner

The bidding process may be a little more complicated than you think. Here we look at a hypothetical snapshot of a random end period.

What you'll see is not just one bidder, one winner, but multiple bids at a time. Keep in mind that slots are divided into 8 leases, so at the time of bidding, each bidder can choose the lease they want from these leases.

Here, for example, Alice is bidding on all eight leases and is willing to lock in 200 DOTs for each lease.

Bob, on the other hand, only wants to rent the first and second leases, offering 100 DOT for each.

When we evaluate each person's bid, we don't really care what their book value is, we add up all the bids that are locked up.

So Alice bid for the full 8 leases, each with a bid of 200 DOT, so the 200 DOT will be locked in for the entire 8 leases. So the value she locked in was 1600 DOT.

Bob only rents two tenancies and bids 100 DOT each, so his lock-in value is 200 DOT.

On top of that, we actually do a horizontal comparison to make the lease as saturated as possible. So you can see that Alice fills the 8 leases alone, but Bob and Charlie need to "put together" to fill the full 8 leases. So we're going to put Bob and Charlie together for the final evaluation.

In this auction, Bob and Charlie will be the final winners. You'll find that neither bid was the highest, but the combined bids of the two of them gave them the highest overall lock-in value, allowing them to win the bid.

4, all the credit

Now, this is the most exciting part, which is Crowdloan.

What is crowdlending? Crowdlending is a fundraising system that allows parallel chains to win slot auctions. In simple terms, DOT holders can lend tokens to parallel chain teams, which can then use the tokens to bid in parallel chain auctions.

Teams can create incentives to encourage users to lend them their own tokens, a common example of which is to distribute their own tokens to crowdlending participants.

Of course, it's just a loan. As with the auction process, all of the crowd participants, all of the DOT holders, will get all their coins back at the end of the slot rental period. We use on-chain logic to guarantee this process. So again, the cost of crowdlending is just the opportunity cost, so it must be a good deal.

Implement your idea through crowdlending

What does that mean?

That means you don't need to be super rich to be a parallel chain in the Boca ecosystem, you just need to have a great idea. If you have a great idea, a sound development team, and some hard work, Boca will provide you with everything you need to go into production.

Earlier we talked about Poka sharing security for different teams. Now it turns out that the Boca Protocol even offers a way to raise money to win slots, which is crowdlending.

Support your favorite team through crowdlending

As a DOT holder, crowdlending is a great way for you to shape the future of the Poka Network. You can support the team that you think offers the most value, while also earning some parallel chains of tokens or other rewards. Remember, any tokens you lend out through the crowd will eventually be paid back to you.

As a parallel chain team, crowdlending is an easy way to decentralize your token distribution from the start. So crowdlending is actually win-win-win.

5. Future plans

Here's a timeline of the auction to give you an idea of where we are now and what to expect in the near future.

Last Thursday, we wired the Shell chain on the Westen test network. Last Friday, we upgraded Kusama to support parallel chain registration, auction and crowdlending processes, so

All of these features are already in Kusama. This Monday, we launched the Shell chain to Kusama.

The next thing that will happen immediately is to upgrade the Shell chain to StateLine, which is Kusama's asset chain, which is similar to StateInt, but on Kusama.

We'll announce an official auction schedule when StateMine is up and running. 4, of course, we'll give you 7 days in advance to take the KSM that Staking you is Staking.

The length of the Kusama auction

The Kusama auction will last for seven days, with two open bids and five with a random closing period. This should allow the team enough time to bid and crowdlend, and the participants enough time to participate in the Kusama crowdlend.

Auction plan

Start with five auctions

1 auction at a time, and a new auction every week (since each auction also happens to be a week long, so it is a series of auctions)

Each auction is for the current lease period (as soon as an auction has a winner, you will see the chain immediately plugged in, and you will see it start to block the same day).

So it's actually quite exciting to think that we are so close to actually bringing Parallel Chain to Kusama.

Polkadot {.js} Crowdcredit interface

For crowdlending participants, we have the Polkadot.js APP, which will give you all the tools you need to participate in crowdlending. Hopefully you are already familiar with using polkadot.js.

The address of polkadot.js is https://polkadot.js.org/

You can select the "Network - Parachain-CrowdLoan" TAB, and you will see all the parallel chain lending activities that are going on, and you will see some different options and configurations for different groups. Of course, this is not all information, you can probably find more information from the parallel chain team on the curve of incentives, engagement, and rewards. Combining this with the information on the crowdlending interface should give you enough information to make an informed decision.

Let's take a quick look at the screen, and you'll see that there are four crowdloans.

Bob's crowdlending has ended; he has already raised the maximum amount of money he wants to raise in the crowdlending, so he cannot accept new contributors.

And Charlie and David and Alice and all the other people are in the process, and each person is bidding for a different lease term, and each person is going to end at a different time.

End times are very important and worth paying attention to. When you participate in a crowdlending activity, you are essentially saying that your money is locked up in the crowdlending process. If your group wins the auction, your funds are locked up until the end of the parallel chain lease. If you don't win the bid, your funds will be locked up until the crowdfunding campaign ends. So you have to think about the end of the crowd.

And of course you can see how much DOT each group wanted to raise, and how much has been raised so far. This information will let you know how many tokens you will receive for the amount you contribute when the token is distributed.

Once you have made a sensible decision, it is very easy to click the "Contribute" button on the right, enter the amount of DOT or KSM you want to Contribute, and you have successfully participated in crowdlending.

Auction winner

Depending on the stage of the auction, there are different definitions of the current "winner," so if you're following the auction process, you definitely need to know about each "winner." What does it mean?

During the open bid period, the winner is simply the highest bidder for each particular lease. If someone makes a higher bid, or a crowdfund raises more money, you'll find that the list of winners keeps changing, as old names disappear and new ones show up.

Then we enter the random end period, where there are many different snapshots for different bid changes. So you'll see snapshots of multiple sets of winners, along with block numbers. Every time there is a new bid, a new snapshot will appear, and you will get a list of all the possible winners. Each of these snapshots could be the ultimate winner of the auction. We'll find out who the ultimate winner is when the random end period runs out.

Finally, when the auction is over and the seed of a random number is generated to select the winner, we have in effect selected a snapshot and determined the winner. We run an algorithm to determine who is the most suitable candidate in this snapshot. Then you will be assigned a lease.

In this example, Bob and Charlie won the auction and their lease has been allocated. If the lease is the current lease, then the parallel chain can go directly online.

What should you do VS what shouldn't you do when crowdlending

There are a few points to be aware of in participating in the crowdlending process.

What to do:

Be sure to watch the announcement of the start of an auction, so you can take advantage of Staking and Staking, so you can participate in the auction.

Be sure to investigate and research parallel chain teams. Because crowdlending is an open and permission-free process, you should be aware that there may be some groups with malicious intent that may not be worth locking KSM for. We have done several rounds of parallel chain and crowdlending tests on Rococo, so you can check out which teams are doing it on the Rococo test network.

What not to do:

Never transfer money to another person to participate in the crowdlending process on your behalf. The whole crowdlending process should be done by yourself on the chain.

Don't lock up all your money in the first crowd. Keep in mind that many groups do crowdlending and may start at different times. So if you lock up all your money in the first crowd, then you don't have any money to go to the next crowd. Think ahead of time about the capabilities these parallel chains provide to make a reasonable allocation of funds.

6, summary

Here's a recap of what we talked about:

Parallel chain slots allow Layer 1 blockchain access to the Poka ecosystem.

Auction is the mechanism for determining which parallel chains get access to these limited slots.

The crowdlending mechanism allows DOT holders not only to shape the future of the Boca Network, but also to have a stake in the rapidly growing Boca ecosystem.

So it's clear why Poca is the best platform for the future of Web3.0. Boca is designed to attract the best and most innovative development teams. We've minimized the barriers to entry into a productive environment, and we've built a vibrant and diverse community that can directly participate and shape the ecosystem.