Polkadot is emerging as an important player in the blockchain and cryptocurrency industry – DOT is already a top 10 crypto asset by market capitalization, and there’s a whole host of projects that are building decentralized applications and protocols for the Polkadot ecosystem. One of the reasons why Polkadot is unique is its parachain auction system.
Projects that want to launch a parachain and connect it to the Polkadot Relay Chain have to win a parachain slot auction, and all the bids are submitted with DOT. Projects can launch “crowdloans”, which allow supporters to temporarily loan out their DOT to help their project of choice win a parachain slot auction. This conveniently also works out as a token distribution mechanism, as most projects have decided to distribute some of their tokens to users who contribute DOT to their crowdloan. The first parachain auction on Polkadot was won by Acala, a DeFi hub for Polkadot.
How to participate in Polkadot parachain slot auctions?
The top 8 parachain auction projects on Polkadot
In this article, we’ll be featuring 8 blockchain projects that are looking to win a parachain slot on Polkadot. The featured projects represent a diverse set of applications for blockchain technology, including decentralized finance, NFTs, privacy, digital identity management and other use cases.
If you’re interested in joining a crowdloan for any of these projects, make sure to check out their official resources to find out their rewards structure and other important information. Also, you should keep in mind that if you contribute DOT to a project that successfully wins a parachain slot auction, your DOT will be locked for a long time (96 weeks). After that period, your DOT will be returned to your account automatically.
Also, you should note that there’s plenty of other interesting projects that are building on Polkadot, but many of them plan to launch their crowdloans and participate in parachain slot auctions at a later date. In this article, we’ll be focusing on projects that are raising their crowdloans at the time of writing.
Without further ado, let’s get into our list of the top 8 parachain projects on Polkadot.
Efinity is a blockchain platform that’s specifically designed for non-fungible tokens (NFTs). The project’s goal is to provide an efficient and scalable platform for minting, transfering and trading NFTs. The Efinity team expects their platform to be able to handle between 700 and 1,000 transactions per second, with each transaction being confirmed within about 6 seconds. Efinity will have a built-in NFT marketplace functionality, which will allow users to exchange NFTs with each other in a decentralized manner.
The platform will have a native token called EFI, which will be used for paying transaction fees, staking, governance, and incentivizing participants to maintain and secure the network. EFI will be used as a currency in Efinity’s NFT marketplace.
One of the more important aspects of Efinity is the Paratoken token standard, which will make it easy for developers to create different types of tokens, whether they be fungible or non-fungible. The paratoken standard will be compatible with the entire Polkadot ecosystem of parachains and parathreads (as well as Kusama).
Efinity is being developed by the team behind Enjin, a pioneering NFT project on the Ethereum blockchain. Given the team’s pedigree, it wouldn’t be too surprising to see Efinity emerge as a leader in the NFT sector on Polkadot.
How to join the Efinity parachain auction on Polkadot?
Moonbeam is a blockchain platform that’s building a smart contracts platform for the Polkadot ecosystem. The goal of Moonbeam is to leverage the already established set of tools for Ethereum smart contract development and combine it with the scalability and interoperability of Polkadot. By providing a full implementation of the Ethereum Virtual Machine (EVM), Moonbeam will offer a platform where Ethereum developers will be able to easily port over their decentralized applications over to the Polkadot ecosystem, or create entirely new application using development tools they are already familiar with.
When Moonbeam is connected to the Polkadot Relay Chain as a parachain, decentralized applications on the platform will benefit from the Relay Chain’s security, and will also be able to interoperate with the other parachains connected to the Polkadot Relay Chain.
The Moonbeam project’s token is called Glimmer (GLMR), which performs a similar function to ETH on the Ethereum blockchain. GLMR is used for transactions and smart contract execution on Moonbeam. However, GLMR is also used for staking and on-chain governance, which are features that are not currently supported by the Ethereum mainnet.
The Moonbeam project has already launched Moonriver, which is a similar platform on the Kusama network.
On November 25, Moonbeam won the second parachain auction on the Polkadot platform. The Moonbeam parachain is expected to go live on December 18, alongside the rest of the winners from the first batch of Polkadot parachain auctions.
3. Parallel Finance
Parallel Finance is a DeFi project for the Polkadot and Kusama ecosystems. The project is building different DeFi protocols that provide essential DeFi functionality for Polkadot and Kusama. This includes a decentralized money market protocol, an automated market maker, insured staking and crowdloan products.
Parallel Finance already features a platform where users can contribute their DOT to crowdloans organized by their favorite projects. By participating in a crowdloan through Parallel Finance, users can earn additional incentives on top of the token incentives offered by the crowdloan projects themselves. When participating in crowdloans through Parallel Finance, users can get liquidity from their contributed DOT even before the standard lock-up period expires. At the time of writing, more than 55,000 users have contributed $680 million worth of DOT through Parallel Finance’s crowdloan platform.
As we’ve mentioned above, the scope of the Parallel Finance project goes far beyond its crowdloans platform, as the project is building out an entire suite of key DeFi tools for Polkadot.
How to join the Parallel Finance parachain auction on Polkadot?
4. Manta Network
Manta Network is a project that’s creating privacy solutions for the Polkadot ecosystem. It uses zk-SNARK technology to give users access to complete anonymity when making their transactions.
While transparency is often touted as an advantage of blockchain technology, there are many scenarios in which it’s detrimental. For example, the on-chain activity of a trader executing a sophisticated trading strategy in DeFi can easily be tracked by other participants, making it more difficult to maintain a competitive edge. Of course, privacy is valuable in itself given the constant expansion of surveillance technonologies and blockchain monitoring.
Through Manta Network, users can deposit tokens to mint a version of the same token with privacy preserving features. These tokens can then be traded through a decentralized private swap platform. Later on, users can redeem their private tokens for the standard, non-private version of the token.
Manta Network has a native token called MANTA, which is used in governance and also gives holders the ability to access the network’s services at a discount. MANTA is deflationary, as usage of the Manta Network (minting private coins and swapping them) contributes to token burns.
How to join the Manta Network parachain auction on Polkadot?
Astar Network is a hub for decentralized applications (DApps) on the Polkadot network. The project aims to provide a scalable smart contract platform that also leverages Polkadot’s interoperability features. Astar supports different layer 2 scalability solutions, including Plasma, the Optimistic Virtual Machine and ZK-Rollups. To give developers even more flexibility, Astar offers support for both the Ethereum Virtual Machine and WebAssembly.
The platform also aims to be an important player in terms of operability, with solutions designed to connect popular blockchains like Ethereum and Cosmos to Polkadot.
Astar’s ASTR token is used for paying transaction fees on the Astar blockchain, staking and governance. The platform has a unique feature called “DApps Staking”, where users can choose to stake their ASTR tokens on decentralized applications. This provides extra incentives for developers to launch their decentralized applications on the Astar platform.
Astar Network has a sister project called Shiden, which runs on the Kusama network. Shiden won a parachain auction on Kusama, and currently runs as a parachain.
How to join the Astar parachain auction on Polkadot?
6. Clover Finance
Clover Finance is creating a layer that enables interoperability between DeFi applications. The project describes Clover as a “Blockchain Operating System” that provides the necessary infrastructure for Dapp data storage, smart contracts, decentralized finance protocols and external applications.
The Clover project also offers a cryptocurrency wallet suite, which is available via a web browser extension, web platform and a mobile app. Clover’s wallet lets users interact with decentralized applications on Polkadot and Kusama (including their respective parachains), as well as blockchains using the Ethereum Virtual Machine and Solana.
The CLV token is used in the Clover ecosystem for staking, paying transaction fees and governance. CLV is also used to reward users on the platform and incentivize them for activities that are beneficial to the Clover ecosystem.
How to join the Clover Finance parachain auction on Polkadot?
Bifrost provides a way for stakers to retain liquidity from their assets even while they’re being staked. Users who stake their tokens receive vTokens representing their staked tokens, and these vTokens can be traded or even staked further. In this way, Bifrost can let users earn staking rewards while also depositing their assets in DeFi protocols to earn interest or farm token rewards. Bifrost also features the Slot Auction Liquid Protocol (SALP), which uses derivatives to provide liquidity to DOT and KSM tokens that are locked through crowdloans.
The Bifrost platform has a native token called BNC. The token is used for collecting transaction fees, governing the Bifrost project and staking to help secure the network. The transaction fees collected by the network go to a treasury that’s used to fund the network’s development.
How to join the Bifrost parachain auction on Polkadot?
Litentry is a project that’s building a network for managing digital identities that are aggregated from multiple blockchain networks. This opens up new use cases in decentralized finance and on-chain governance system, and even allows for decentralized Know Your Customer (KYC) checks. Users can aggregate their activity from different blockchains to receive their overall credit and reputation information. Decentralized applications could implement this data to price their services – for example, a user with a strong reputation score might be able to access DeFi services at better rates.
Litentry’s digital identity (DID) validation is built using the Substrate framework, making it compatible with Polkadot and Kusama. The project’s LIT token is used to incentivize network validators, provide rewards for third parties that create identity databases, as well as staking.
How to join the Litentry parachain auction on Polkadot?
The bottom line
As we can see, there’s plenty of fascinating projects that are competing to get a parachain slot on the Polkadot network. Participating in parachain auctions can be a great way to earn tokens from promising projects. You have to take the liquidity costs of locking up your DOT into account, but these can be mitigated with liquid crowdloan services that are already starting to emerge. Hopefully, the 8 projects we’ve highlighted have given you a useful introduction of the diverse ecosystem that’s being built around Polkadot.
Source link: https://coincodex.com/article/12972/top-8-polkadot-parachain-auction-projects/