Thread by @danreecer_

The first-ever parachain slot auction on @kusamanetwork has begun!

Quick rundown of what happened the past week, what's happening now, and what's coming in the next 7 days.

Comment with questions and feel free to share if you learn something ⤵️

In the past week, many teams have opened their 'crowdloan' to garner $KSM contributions from their communities in support of their bid in the parachain slot auction. @KaruraNetwork, for example, currently has 362,791 $KSM in the crowdloan.

We have now entered the 'opening period' of the auction which you could think of as just a 2-day warm-up period. The winning bid cannot be chosen during this period. You'll see a blank screen on Polkadot.js dashboard because crowdloans auto-bid on day 3 - the 'ending period'.

You can view the auction dashboard on Polkadot.js here: polkadot.js.org/apps/?rpc=wss%… or on Subvisio here: subvis.io

On Thurday around 12pm UTC, the real games will begin. This is the start of the day 3-7 'ending period'. Each team's full crowdloan will automatically bid once this ending period begins, like pushing a stack of poker chips all-in.

During the auction, crowdloans remain open. Anyone can continue to contribute to a parachain team's crowdloan to increase their bid. Any new contributions to the crowdloan will be reflected in the team's cumulative bid at the end of each block (green arrow showing bid increase).

At the end of the 7 days, a random block in time will be chosen from the ending period. The highest bid at this time will win the 1st parachain slot on @kusamanetwork. In this example, @KaruraNetwork would win with a 400k $KSM bid.

So, teams will want to get in their highest possible bid during the ending period to give them the best chance of having the highest bid during each block of time during the ending period.

Here is a breakdown of this process showing what would happen if the randomized block was selected during ~day 5. In this example, Karura's bid would have increased to 400k $KSM and would be the highest bid at that point in time.

In this example, although the winning bid was 400k, this example shows that 550k KSM total would be locked for the 48-weeks of this parachain slot since that was the crowdloan's end amount. Users would get $KAR rewards even for bids after the winning block time.

Remember that all $KSM contributed to the crowdloan is never touched by the team. It is all locked - kind of like a stake of KSM to maintain the lease on that slot.

Here is a look at the full process from crowdloan to auction to launch. All contributed $KSM is returned to the community at the end of the 48-week parachain slot.

If a team doesn't win the first auction, their crowdloan will remain open so they can bid in subsequent auctions with the same crowdloaned $KSM. On Polkadot.js, the "Days" on the dashboard show the days left to use the crowdloan as a bid.

Since we're just in the beginning of Kusama's life, auctions will be paused after the first 5 auctions. In the future, these will continue running on a periodic basis until we scale to 100+ parachains.

Here is a thread on the upcoming DeFi Hub of Kusama, @KaruraNetwork, which is currently leading in the auction process.

https://twitter.com/KaruraNetwork/status/1399444372379226114?s=20

Check out the Karura crowdloan webpage for stats and instructions on how to participate: acala.network/karura/join-ka…

My bad, it actually looks like this. I had it right in the text (day 3) but arrows were wrong on the original tweet.