| Kraken Intelligence

Polkadot and Kusama Parachains Primer

Polkadot and Kusama are two emerging blockchains with an exciting feature known as parachains, which are custom blockchains selected by public auction to join these exclusive networks. While this novel selection process has garnered a lot of excitement, there is still confusion as to how it works.

In Kraken Intelligence’s latest report, “Polkadot & Kusama Parachains Primer,” our team takes a deep dive into parachain auctions and examines how individuals can earn rewards funding the next generation of blockchain initiatives on Polkadot and Kusama. 

When entering a parachain auction, blockchain projects must bid for one of the 100 slots on the Polkadot and Kusama networks using their own DOT or KSM tokens, borrowing funds, or both. A “crowd loan” process allows individual crypto holders to lend, or “bond” their tokens to bidding projects, who in turn reward this support with a new native token if they win the auction, or return the bonded crypto in the event they lose.  

Kraken’s recent launch of a parachain auction platform to simplify individuals’ participation in auctions has so far seen significant adoption. Recent winners of slots on the Kusama network include:

  • Karura – The first parachain auction winner by the Acala foundation which aims to be a scalable, all-in-one decentralized finance (DeFi) platform with minimal fees.
  • Moonriver – A smart contract platform that supports Ethereum decentralized applications. It will serve as a canary network for Moonbeam.
  • Shiden – A smart contract platform for decentralized applications. Shiden supports layer 2 solutions and serves as a research and development canary network for Plasm (PLM).
  • Khala – A canary network for the Phala network, Khala enables decentralized cloud processing and could open up possibilities for privacy-protected DeFi trading.
  • Bifrost – Provides users the ability to stake any cryptocurrency on its platform. Users are given a vToken after they stake crypto that gives them access to DeFi applications built on Kusama.

Read Kraken Intelligence’s “Polkadot & Kusama Parachains Primer” to learn more about parachain auctions, how they work within the Polkadot and Kusama networks, and why they are so important to the growth of the crypto ecosystem.


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