This article summarizes the parachain auction status and strategy for Litentry from the team’s view, feel free to comment with your opinions if you have any.
TLDR:
- We will attend parachain auction firstly on Kusama as transition, and finally on Polkadot.
- Based on our development progress
- Functionality first strategy
Parachain Auction Analysis
- The parachain auction use Candle Auction Strategy, which means it will ends in a random point (decided by a VRF), the highest bid at that moment will win, which means if we want to win a parachain with a higher chance, we will need to monitor the auction process and make sure we are leading the bids during the whole auction.
- Once we get the parachain slot, our token should be active on a Substrate-based network. For LIT token which is issued on Ethereum with an ERC-20 format, we will need to migrate all of it to our Substrate-based Network.
- After our Mainnet is launched on Polkadot, the technical metrics of the Parachain will be taken into account. So that it is also critical to have a real XCMP use case with the parachain rather than a minimal parachain only with
crowdloan(parachain auction) feature. - When a user is joining a parachain auction, his/her KSM/DOT will be locked for the whole auction period.
- Currently the APY for a user to stake KSM/DOT to its mainnet is around 15%, this is a common indicator that projects will use to measure the minimum return rate for their crowdloan campaign.
- Once a parachain leasing period ends, it will become a standalone parachain and it needs validators to maintain the network, so ideally once connected, the team should always be preparing for the parachain auction and always connected as a Parachain.
- The parachain on Kusama should be able to join the Polkadot parachain auction, and once it wins, the parachain could directly be connected to Polkadot.
- The Kusama and Polkadot have their separate focus, several Parachain teams have launch two parachains on different platforms, but it is still questionable that if it is really needed. If they have the same functionality, then it becomes extremely hard to maintain two community and two token markets.
Functionality First Strategy
The main purpose of Litentry Parachain Auction is to launch Litentry Network to a relay chain and benefit from a multi-chain ecosystem. And additionally, we would like to be connected to Kusama/Polkadot with real use-cases of Litentry Protocol.
Current Litentry is:
- The LIT token is listed as an ERC-20 token on Binance, thus we need the “claim” module to burn the user’s ERC-20 token and regenerate it on our Mainnet.
- The Litentry Protocol is capable of linking Web 3.0 with identity across networks, it has huge potential of leveraging the on-chain data world. Once we launch our parachain, we will be able to start encouraging users to register cross-chain identities to empower the network. So we want to make sure this feature is ready before Litentry parachain auction.
- Our parachain currently has these functionalities under development: Identity Registrar (account linker), Off-chain Worker (credit computation), Smart Contract (customized credit computation).
- We have a plan to cooperate with exchanges on Parachain Auction on Polkadot.
Considering the above aspects, We want to be connected to the relay chain with our main features onboard.
Functionality first strategy for Litentry.
- We will start the parachain auction with at least one key module ready, and the estimated finish time will be 2 months from now on.
- We will only have one parachain ready for auction from the start, and we aim to firstly join the Kusama parachain auction. It is good if we could join the Kusama Parachain auction as early as possible after our main features are ready.
- As Kusama and Polkadot have their specific purpose, Kusama to be wild and more community-focused, Polkadot aims to be stable and more enterprise-focused, the credit computation features should be finally onboarded on Polkadot, that’s why our final goal is Polkadot.
- In the future, if we have more and more wild/experimental modules, we will think of the idea of having a community-owned new Parachain (not LIT) on Kusama.
- Litentry team will keep contributing to the common-good system Parachain.
Upcoming we will be announcing a Parachain Crowdloan Offering plan for the Kusama parachain slot auction, stay tuned!