What is the Impact of Slot Auctions on the Further Growth of the Polkadot Ecosystem?
PolkaWorld held its 5th “Ask Me Anything” online video broadcast last Thursday, answering your questions in one place and organizing some frequently asked questions into a text version for your easy reference.
1.Do ALL projects in the Polkadot Ecosystem HAVE TO bid twice, for both Kusama and Polkadot slots?
PolkaWorld: Projects vary from each due to their own conditions, currently can be breakdown as follows:
There are projects running one network. They have two options： Either bidding on a Kusama slot or a Polkadot one ；or winning both one by one and switching their network from one to another when expire. For example, KILT took the first option and Bifrost the second.
Some projects operate two networks, a canary network and the main net one. They have to get them deployed on Kusama and Polkadot relay chains separately. Thus bidding on both Kusama and Polkadot slots is a must. The TWO chains will be running parallel with each other. In that case, you can say, you HAVE TO bid for twice! For example Acala, Plasm.
There is a concept we should be fully acknowledged of, the purpose of slot auctions.
When you win a slot, your chain will have the access to the relay chains your slot belongs to. It’s the accessibility that you are bidding for. while Kusama and Polkadot are totally two separate chains and fully independent of each other. Therefore, it is not the case that when winning the Kusama slot, you will be able to move to the Polkadot afterward. You have to bid for both.
You can firstly win the Kusama slot， after expiring， then biding for the Polkadot slot as you wish. whatever. but there is no such thing as bidding on the Kusama slot and then panning to the Polkadot, That is not going to happen!
2. Will the Staking and KSM/DOT slot lock-up lead to deflation in the secondary market, thus driving their prices to sore?
In the Polkadot token setup, the best three-party game between Staking, Slot Auction, and Circulation is 50%: 33%: 17%.
It is obvious to see that when the ratio reaches 50%, the Staking party, i.e., the Validator and Nominator, will get the highest payoff. whereas, when above or below 50%, their return will decrease.
The game formula, therefore, will positively verge the Staking share onto 50%， with the other tokens naturally flowing into the parachain auction party. However， the tokens, locking in a parachain， will not get any staking revenue, that’s why, to motivate the token lockers, the parachain projects will reward them with their native tokens.
As a matter of fact, it is processing the deflationary. Deflation, from an economic point of view, will cause an increase in value for sure. while who knows what the market will end up with, we are looking forward to it!
From another perspective, Polkdot was just a meta-protocol with no more than the basic infrastructures before accessing the parachain. However, after, its ecosystem will start to grow unstoppably and boldly pave its path to a future with infinite value. I personally foresee that the biggest part may come from the incremental market of Defi!
3. What is the impact of slot auctions on the further growth of the Polkadot ecosystem?
PolkaWorld：As mentioned above, first of all, the Polkadot slot auction is boldly paving its way to a future where its ecosystem blooms rapidly. It also opens up the door to value capture. From then on, a constant stream of value will be incorporated into its blockchain network, increasing its value continuously.
Secondly, the promising projects will be seen after crucial testing from the community, market, and capital. The Polkadot ecosystem will be heading to rapid and healthy growth.
We will immediately enter the era of interoperable multi-chains right after the auction!
Let’s embrace what will come next together!
4. Regarding Polkadot， there have been two voices talking in the markets. One believes that Polkadot is the next Ethereum, while the other holds that it’s more like ESO because its slot auction is highly similar to the EOS node campaign. What role, do you think, the Polkadot is playing?
PolkaWorld：It’s been the most frequently asked question since the early days. To briefly summarize, Ethereum and EOS are single-chain smart contract systems, while Polkadot is a scalable heterogeneous multi-chain system.
That is to say, Polkadot is an entirely new era of blockchain from the layer 1 networks, the closed single chains, in the market. For example, Bitcoin is a system that implements peer-to-peer transactions, Ether and EOS committed to smart contracts, Filcoin focuses on storage, etc.
Nevertheless, Polkadot is a Layer0 meta protocol that does not provide any intrinsic functionality, but only security!
One common trait among Bitcoin-and-Etherium-like chains is that their security was garented by notes, and mining machines are also required, whose operating costs are very high. Polkadot plays the role to provide security for these single chains, and all they need is to focus on their own functions, thus hugely saving development costs and maintaining chain security costs.
Meanwhile, the Substrate framework allows you to customize your chain and still enjoy interoperability! This is the role Polkadot plays, the heart of security for Layer1!
Slot auctions and EOS campaigns. they are not the same things. Let alone saying they are “highly similar”.
Slot auction is actually locking DOT/KSM to rent “verifier nodes”, which is a real competition for scarce resources! The subject of the auction is a chain, which can be linked to the Polkadot main net after a successful auction, and operate safely. However, the EOS node campaign uses EOS to vote for the node, which is a competition for “network revenue share”, the subject of the campaign is a node, in the end, winner nodes can share more profit!
5. Is Polkadot the commanding height of high-technology compared to Etherium?
PolkaWorld: There is no doubt that Polkdot represents the most cutting-edge blockchain technology in the market! Ethereum brings forth new ideas of smart contracts, which have seen too many limitations to breakthroughs in its architecture. Polkadot goes beyond it, providing a more underlying， more universal Layer0 meta-protocol! Even though Ethereum is currently the second-largest blockchain, its closed system still tracks it.
Polkadot, as a multi-chain system, is born to break the dominance of one chain era! From single to internet is the trending, we are just following the time.
About PolkaWorld
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