Polkadot founder Gavin Wood has drawn up a schedule for the first series of five auctions, starting next Tuesday.
Statemine, the first real-world operating parachain, began processing permit-free transactions on Kusama last week. This means that the network is now ready to launch parachain auctions.
Kusama is a “Canary Network“for Polkadot and the first heterogeneous “home“and fully decentralized blockchain. Polkadot creator Gavin Wood announced the next steps for Kusama in a blog post yesterday.
Unless unexpected problems arise with the logic of the relay chain, the auction for the first Kusama Parachain slot will open on June 15. A week later, the auction ends and the winner is determined. Whoever placed the highest bid at a randomly chosen time within the last five days wins.
An hour after the winner of the first slot is determined, the auction for the second slot begins. Three more auctions will follow on the following three Tuesdays, so that a total of five Parachain auctions will take place in the coming weeks.
After a pause, during which the overall performance of the network is evaluated, five more auctions are held in a similar way. Final decisions on the timing of the auctions and what happens on Kusama are in the hands of the Kusama Council and the assembled KSM stakeholders.
The auctions serve as a market-oriented method to determine which projects to add to the Kusama network. With their bid, the participants indicate how much KSM they want to block for the duration of the lease. Thus, the largest amount of KSM is blocked in the auctions.
Teams can also fund their bids through the crowdfunding mechanism built into Kusama. Projects supported by the KSM community have better chances of winning. KSM holders who support winning bids can be rewarded with project tokens at launch.
Projects that want to participate in the auctions include the decentralized financial platform Karura, the decentralized app hub Shiden Network and the smart contract platform Moonriver.
The KSM price has increased by 24% in the last 24 hours, as probably many bought the token to participate in the auctions. In the coming weeks, a large amount of KSM will be blocked for parachain leases, effectively reducing current assets. This could mean that KSM will make even more profits this year.
Once the parachains on Kusama run smoothly and the necessary audits are completed, the parachains on Polkadot will be activated and the Polkadot slot auctions will begin.