The Second-Edition Of Kusama Parachain Slot Auctions Promises Heated Competition
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
The Kusama team commenced the second installment of the highly successful Kusama parachain slot auctions on September 1st. In this iteration, the Kusama team will host five rounds of auctions over five weeks, similar to the first five rounds held during June and July. Auctions will begin within two days of initial bidding for each round, followed by a five-day ending period.
Kusama's first five rounds of auctions witnessed some of the most promising blockchain projects bid for the limited slots. The second installment, too, promises a lineup of some fantastic projects, each designed to help promote the widespread adoption of blockchain technology.
Cherry-Picking The Most Promising Blockchain Projects
To understand what makes Kusama one of the most preferred choices for new projects, we need to understand the underlying concept of parachains and relay chains. These are independent blockchains running in parallel within both Polkadot and Kusama networks. A relay chain is a primary network where all transactions are finalized. A parachain is a custom blockchain connected to a relay chain that uses its computing resources to validate the accuracy of the transactions.
Kusama serves as the testnet (testing environment) or Canary Network for Polkadot. For any project to be deployed on Polkadot, it must first experiment and validate its code structure and functionalities on Kusama. As a testnet for Polkadot, Kusama offers a multichain architecture, a flexible governance framework, and comparatively lower staking requirements to help dApp developers test their products. As of now, both Kusama and Polkadot support up to 100 parachains.
To reduce the number of projects vying for access to the limited number of relay chains, the teams behind Kusama and Polkadot are using the parachain slot auctions so only the most deserving blockchain projects can take advantage of the relay chains and distributed computing power.
Simply put, the Kusama parachain slot auctions are a way to decide which parachain will be connected to its relay chain. Parachains that win a slot in the auctions will first be deployed on Kusama to ensure everything is working correctly before extending the same functionality to Polkadot. The core idea of these auctions is to create a sense of scarcity and competition, which helps ensure that only active projects (parachains) with well-planned tokenomics and community backing wins a slot.
Kusama offers functional markets and testnet conditions that other chains cannot match as a live blockchain network. Using the revised governance process, Kusama can deliver performance up to four times faster than Polkadot. Due to this, many next-generation blockchain projects are lining up to use Kusama to debug and deploy their dApps.
Centrifuge's Altair Emerges As A Prime Contender
The Kusama parachain auctions are now live, as dozens of promising blockchain projects bid for the limited slots. Among the participants, Polkadot's very own Centrifuge is also entering the competition to win a slot for its Altair testnet.
Since its launch, Centrifuge has received backing and capital support from some of the most prominent investors and VC firms in the blockchain ecosystem. The platform has raised $8 million from its first seed round in 2018 and $4.3 million in 2020. Moreover, Altair participated in the fourth Kusama parachain slot auction in June, where it raised upwards of 6,000 KSM via its crowdloan, underlining the support it has from its community.
Founded in late 2017, Centrifuge, the world's first real-world asset (RWA) financing platform for DeFi, is built on Polkadot to ensure fast processing and low fees. It also features the highest TVL in the Polkadot ecosystem. Through its asset-backed lending DApp, Tinlake, users can tokenize assets like real estate, royalty payments, and invoices and use them as collateral to access financing.
On the other hand, Altair serves as the testnet for the Centrifuge, just like Kusama does for Polkadot. Built using Substrate and almost the same codebase as Centrifuge, Altair is responsible for deploying and testing new platform features before being extended to the Centrifuge Chain.
Once deployed on Kusama, Altair will bridge the Polkadot, Kusama, Ethereum, and Centrifuge ecosystems, enabling participants to access cross-chain liquidity. The Altair platform will also serve as the experimental platform where users can tokenize and finance their real-world assets on the Kusama network. Once Centrifuge is fully deployed on Polkadot, Kusama will be responsible for minting art NFTs (non-fungible tokens), financing uncovered assets and supporting any other initiative promoted by the community.
While several other prominent contenders are bidding for a slot through auctions six to ten, Centrifuge's Altair has cemented itself as one of the most promising projects. This is primarily due to its long-term plan to utilize Kusama and Polkadot to the fullest extent while conveying greater interoperability across several prominent chains.