Polkadot Canary Kusama to Launch Five Parachain Auctions in September

Kusama Announces Second Batch of Parachain Auctions from September

Kusama is a highly experimental network that allows developers and teams to build, deploy and test their projects on Polkadot and get a feel for its governance. Also known as Polkadot’s canary network, Kusama leverages the sharding technology and has one core blockchain which communicates with other side chains, or parachains.

Contrary to perceptions, Kusama is not just an inferior version of Polkadot. The blockchain boasts high flexibility and speed, which have compelled many DApp (decentralized application) developers to stay with it instead of transitioning to Polkadot. Additionally, it is a vital asset to teams that are looking to battle test their product before deploying it to the Polkadot mainnet.

With all these benefits, it makes sense that the network is in high demand among blockchain developers. To cater to them, Kusama organized its first parachain auction this summer. In the end, Kusama selected five winners -- Karura, Moonriver, Shiden, Khala, and Bifrost -- who got the opportunity to benefit from its built-in, forkless upgradability provided by Substrate.

Now, Kusama is gearing up to begin its next phase of auctions in September. This will also be a chance for users to bid their KSM tokens -- Kusama’s native currency -- on their preferred projects for a fixed allocation time. The winning projects will then be decided based on their funding totals.

What is Crowdloaning on Kusama?

Kusama uses a crowdloaning mechanism that allows anyone on a parachain to create a loan campaign for a slot by depositing a fixed number of tokens. It is similar to liquidity mining on Ethereum, where participants get token grants from their favored DeFi project.

Once a crowdloan campaign achieves its intended target, its parachain is on-boarded on the Relay chain -- the main network of Polkadot where transactions are finalized. Also, the tokens accumulated for the project get locked in its account for the duration in which the parachain is active.

Out of the teams that took part in the last auction, DEX platform Karura acquired the maximum number of tokens, with an initial TVL (total value locked) of more than 500,000 KSM, equivalent to $90 million at the time.