After Wednesday’s successful vote on a proposal to schedule the first set of parachain auctions, the price of Polkadot’s native DOT token has experienced a sharp price increase and has gained more than 20% in the span of four hours. Parachain auctions were first outlined in the project’s white paper five years ago, and now they are finally ready for launch.
Key takeaways:
- The first set of parachain auctions, which include five decentralized crypto projects, will begin on November 11. Each auction will last seven days with one new auction scheduled each week.
- The second batch of auctions that was proposed by the Polkadot Council will commence on December 23. Like the auctions from the first batch, these auctions will also last seven days each, however, new auctions will begin on a bi-weekly basis.
- The first five blockchain auction winners will be onboarded to Polkadot later this year, on December 15, and will be assigned a parachain slot for a duration of 96 weeks.
- To prevent so-called auction sniping, Polkadot will employ a candle auction method, which prevents participants from knowing the exact end time of a particular auction using randomness mechanics.
- Crypto projects will compete for a slot allocation, which will let them build on the Polkadot network for 96 weeks. The auction model benefits projects that have the strongest community support, as they are able to crowdloan most efficiently. Auctions will take place in DOT.
- Parachains are customized blockchains designed to feed into the mainchain. Since they are tailored for project-specific use cases, parachains can achieve higher throughput while retaining lower transaction costs than the main blockchain. Parachains were first introduced in Polkadot’s white paper, and later incorporated into Polkadot’s canary network Kusama.
- Polkadot was created by Ethereum co-founder Gavin Wood, who envisioned a heterogeneous multichain framework, which can combine external networks and customizable parachains to create an “internet of blockchains.”
- Following the announcement of the parachain auction schedule, the price of DOT jumped by 20% and reached the highest value in the last 5 months.
