Overview of Auction Strategies for Unlaunched Projects in the Polkadot Ecosystem, such as Acala, Bifrost, Plasm, etc

This article is from the Blockchain Study Society.

The Polkadot parachain testnet Rococo v1 has completed the first round of slot auction testing.

On March 16, Parity engineer Shawn Tabrizi announced that the Polkadot parachain crowdfunding module has released its codebase.

On March 25, the Polkadot parachain testnet Rococo v1 launched its first round of slot auction testing.

Recently, there have been continuous actions related to Polkadot slot auctions. As the process continues to advance, we are getting closer to the time of the Polkadot slot auctions, and we believe that we will frequently see news related to slot auctions in the near future.

As the development progresses, projects in the Polkadot ecosystem that aspire to participate in the first round of slot auctions are also gearing up and ready to go.

The Study Society has previously organized the auction strategies of some projects in the Polkadot ecosystem and reviewed the development progress of DeFi projects. For details, click: “Slot Auction Gearing Up, A Comprehensive Overview of Polkadot Slot Auctions!” and “On the Eve of Polkadot Slot Auctions, An Overview of the Current Progress of Polkadot DeFi Protocols.”

Today's review will be more concrete, mainly focusing on the auction strategies of well-known projects in the ecosystem that have not yet launched tokens.

Why emphasize unlaunched tokens? Because projects that have already launched tokens can easily be seen by participating users as a relatively certain financial investment, while unlaunched projects have a lot of imaginative potential, which may provide additional attraction to users.

This article selects four well-known projects that have not yet launched tokens, namely Acala, Plasm, Bifrost, and Moonbeam, to outline their auction strategies for readers.

1. Acala

Acala is a well-known project in the Polkadot ecosystem, aiming to become a decentralized financial center and stablecoin platform. Acala mainly has three business segments: a cross-chain multi-asset collateral stablecoin system, a liquidity release protocol, and a DEX trading platform. Subsequently, Acala, along with Laminar and Band, established the Open Oracle Gateway, which involves oracle services.

Acala is also a smart contract platform, and for Polkadot parachains, becoming a smart contract platform is not too difficult. Since the Polkadot ecosystem is just starting, many projects within it have a broad business scope, which is understandable, but whether they can succeed will depend on specific developments.

The various business modules of Acala are as follows:

Acala's main business is a multi-asset collateral stablecoin system similar to Maker. Based on Polkadot's cross-chain characteristics, Acala has created a naturally cross-chain multi-asset collateral stablecoin system.

Currently, centralized stablecoins occupy a large share of the stablecoin market, but decentralized stablecoins are still essential in the blockchain world. The construction and operation of decentralized stablecoin systems have relatively high barriers to entry, unlike DEXs, which can be easily forked and launched. High barriers also mean a protective moat; once a relatively mature product exists, later entrants must think carefully about entering the market.

In addition to stablecoins, other businesses are also common and important in the blockchain world. For example, DEXs and oracles are very important in the blockchain world, but there are many competitors. Acala's liquidity release protocol is currently planned to only provide services for staked DOT and KSM, which will release some liquidity from locked assets and increase the amount of circulating assets within the Polkadot ecosystem. The released liquidity can be used for trading and can also serve as collateral in Acala's stablecoin generation system, providing a use case for liquidity release tokens while also supplying assets for its own stablecoin generation system.

Regarding slot auctions, according to Parachain data, Acala intends to allocate 10% of its tokens for a 6-year slot lease. The ACA tokens obtained by users participating in the auction will initially have only 20-30% in circulation, with the remaining tokens released throughout the lease period. Unreleased tokens can participate in project governance. The phased or linear release of reward tokens is an inevitable choice for the vast majority of projects.

The total supply of Acala tokens is 100 million, with the distribution ratio as follows:

20.25% - Team (20,250,000 ACA)

5.00% - Ecosystem Development (5,000,000 ACA)

11.62% - Foundation (11,620,000 ACA)

18.33% - Seed Round (18,330,000 ACA)

10.80% - Series A (10,800,000 ACA)

34.00% - Rewards (34,000,000 ACA)

The 10% allocated for parachain auctions is included in the 34% rewards.

Acala has launched a canary network based on Kusama called Karura. According to public information, Karura will allocate 11% of its tokens to participate in Kusama slot auctions. Currently, Acala has held multiple rounds of pre-heating activities for slot auctions and has recently connected to the Rococo v1 parachain testnet.

In terms of community building, Acala has 57,000 followers on Twitter and 17,000 members in its Telegram group.

2. Plasm Network

Plasm is also a highly regarded project in the Polkadot ecosystem and was the first to connect to the Polkadot parachain testnet Rococo v1. Plasm is one of the few smart contract platforms in the Polkadot ecosystem that focuses on Layer 2, compatible with Ethereum, and aims to provide better scalability for the Polkadot ecosystem. Its architecture can be understood as creating an ETH2.0 on Polkadot.

Plasm has strong technical capabilities and has received grants from the Web3 Foundation six times.

Plasma modules for Substrate (GitHub)

ink! Playground (GitHub)

Plasm Chain + OVM Implementation (GitHub)

ECDSA for Polkadot JS (GitHub)

Hardware ECDSA for Polkadot JS (GitHub)

ZK Rollups Pallet (GitHub)

Recently, Plasm has achieved compatibility between Plasm Network and ZK Rollups, allowing the use of Layer 2 solutions based on the Polkadot network.

Plasm's token distribution model is quite unique; Plasm has conducted two large-scale locked airdrops, meaning its tokens have been continuously distributed to retail investors before the mainnet launch, which is relatively rare.

Users will continuously pay attention to Plasm's progress during the locking process, bringing potential users to Plasm. Additionally, the issuance and launch of tokens will repeatedly stimulate significant attention, helping Plasm acquire users, and a larger user base is crucial for a smart contract platform.

Plasm's locked airdrop saw over 16,000 ETH locked in the first round and over 150,000 ETH in the second round, with many participants, and the third round of locked airdrop will be used for Polkadot parachain slot auctions.

The total supply of Plasm tokens has not yet been determined; it will be confirmed after the third locked airdrop concludes. Currently, it is known that Plasm has issued a total of 22.2708 billion PLM tokens through two locked airdrops plus an additional 35% (for the team and community).

Plasm currently does not have a clear slot auction strategy, but it has designed a specification that provides different reward coefficients for different locking periods, as follows:

Locking for 30 days - x 24 reward rate

Locking for 100 days - x 100 reward rate

Locking for 300 days - x 360 reward rate

Locking for 1000 days - x 1600 reward rate

Locking for 2 years - x 2000 reward rate

All project parties will provide more incentives for long-term supporters, and Plasm is no exception. From the introduction, it appears that the base of Plasm's reward rate is set according to the previous locked airdrop rewards.

Plasm has also launched a canary network based on Kusama, and it is reported that it will allocate 32.5% of its tokens for slot auctions on Kusama, while participants in the Plasm locked airdrop will receive a 1:1 allocation of canary network tokens.

In terms of community building, Plasm has 33,000 followers on Twitter and 13,000 members in its Telegram group.

3. Bifrost

Bifrost is a DeFi protocol focused on releasing liquidity for staked assets. Bifrost has already launched ETH 2.0 Staking liquidity release services and will also provide liquidity release services for slot auctions.

Most current public chain ecosystems use PoS and its variant consensus mechanisms, requiring a large amount of tokens to be staked to ensure network security. With the development of DeFi, two scenarios may arise in the network.

One is that a large number of tokens are locked through staking, making the network very secure, but this may lead to insufficient liquidity of tokens, affecting ecosystem development. The other is that a large number of tokens circulate within DeFi, with fewer tokens participating in staking, resulting in ample liquidity but potentially compromising network security. The essence of both scenarios is the competition for assets between staking and DeFi, and Bifrost was born to solve this problem.

By staking through Bifrost, users can earn staking rewards while also receiving liquidity release tokens, which can be traded, transferred, and used in various DeFi activities. Liquidity tokens can be redeemed in proportion to native assets and continuously earn staking rewards, making them income-generating assets.

Currently, Bifrost has launched ETH 2.0 Staking liquidity release services, and the progress is quite good, with the amount of ETH staked through Bifrost exceeding 17,000, and locked assets surpassing 28 million USD.

With the progress of Bifrost's liquidity release services, Bifrost may introduce a large amount of external assets (such as the currently valued over 28 million USD vETH) into the Polkadot ecosystem, becoming one of the entry points for external assets in the Polkadot ecosystem.

Bifrost has clearly stated that it will provide liquidity release services for Polkadot parachain slot auctions, meaning that DOT and KSM participating in slot auctions through Bifrost can maintain liquidity while receiving slot auction rewards. For those worried about being locked up for too long and missing opportunities, Bifrost can perfectly alleviate concerns about participating in slot auctions.

Bifrost has already connected to the Rococo v1 parachain testnet and is currently holding a vETH holder airdrop event.

Bifrost has a total token supply of 80 million, and according to official information, Bifrost will allocate 13.5% of its tokens as incentives for slot auctions, aiming to obtain 4 years of parachain slot usage rights.

The distribution ratio of Bifrost tokens is as follows:

45% - Ecosystem (36,000,000 BNC)

20% - Team (18,000,000 BNC)

10% - Foundation (8,000,000 BNC)

10% - Reserve (8,000,000 BNC)

10% - Seed Round Sale (8,000,000 BNC)

5% - Private Sale (4,000,000 BNC)

The specific uses of the 45% allocated for the ecosystem are as follows:

30% - Polkadot parachain slot auctions (10,800,000 BNC)

5% - Kusama slot auctions (1,800,000 BNC)

45% - vToken incentives (16,200,000 BNC)

10% - Collector incentives (3,600,000 BNC)

10% - Slash insurance fund (3,600,000 BNC)

Bifrost has not launched a canary network for Kusama; it only has one network. Bifrost will first auction slots on Kusama and then conduct Polkadot slot auctions during the Kusama consensus period, achieving an upgrade from the Kusama consensus network to Polkadot.

According to white paper information, Bifrost will allocate 2.25% of its total token supply as rewards for Kusama parachain auctions.

According to official news, a portion of the total 10% of tokens will be allocated after the specific slot auction rules are announced, with a probability of being fully allocated to the slot auction.

In terms of community building, Bifrost has 19,000 followers on Twitter and 19,000 members in its Telegram group.

4. Moonbeam Network

Moonbeam Network is an Ethereum-compatible smart contract platform. Moonbeam launched its testnet in 2020 and recently released a new round of testing with the Alpha v6 version.

Moonbeam is a relatively pure project focused on building a smart contract platform, and the new testnet has already allowed users to participate in governance and staking.

The total supply of Moonbeam tokens is 10 million, with the distribution ratio as follows:

14% Seed Round Sale (1,400,000 GLMR)

12% Strategic Sale (1,200,000 GLMR)

16% Public Sale (1,600,000 GLMR)

15% Parachain Bond Funding (1,500,000 GLMR)

0.5% Parachain Bond Reserve (50,000 GLMR)

0.5% Treasury (50,000 GLMR)

17% Ecosystem (1,700,000 GLMR)

4.5% Developer Incentives (450,000 GLMR)

4.5% Partners and Advisors (450,000 GLMR)

1.4% Early Supporters (140,000 GLMR)

10% Team (1,000,000 GLMR)

4.6% Future Employee Incentives (460,000 GLMR)

Moonbeam has reserved 15.5% of its tokens for slot auction fees for years 1-6, but this portion of tokens may not be entirely used for user rewards; it may also be used for interest payments on borrowed DOT to participate in auctions. The specific usage strategy still needs to wait for official announcements.

Moonbeam has also issued the Kusama parachain Moonriver, which has allocated 60% of its tokens for slot incentives and reserved 15.5% of its tokens for parachain bond financing.

Currently, several well-known DeFi protocols have announced plans to build products based on Moonbeam, such as Injective and Sushiswap, and Human Protocol has also announced its expansion to Moonbeam.

In terms of community building, Moonbeam has 33,000 followers on Twitter and 10,000 members in its Telegram group.

5. Conclusion

Polkadot slot auctions are in full swing, and we may soon witness further progress. The slot auction testing that began yesterday has already hinted at something, and perhaps we will soon witness the initiation of a milestone event in the Polkadot ecosystem.