Thread by @mohakagr

(1/n) The @Polkadot @kusamanetwork ecosystem is one of the most complex ones with #Parachain auctions, crowdloans, relay chains, and so much more.
If you have heard about these terms and want to do a deep dive, here's a 🧵
👇

(2/n) @Polkadot is a blockchain of blockchains, a Layer 0 that can communicate with other blockchains and their applications through parachain slots. The relay chain is the skeleton core that supports governance, NPoS staking, and auctions.

(3/n) @kusamanetwork, on the other hand, is the sibling of Polkadot, with its standalone network primarily based on a similar code. It's an experimental proving ground for early-stage dev and faster iterations. DO NOT mistake Kusama as the testnet for Polakadot.

(4/n) Parachains sit on the relay chain and use the relay chain security. Can run parallel transactions, offer interoperability via XCMP. Due to limited slots (100 rn), parachains are allocated to:
- Auction winning parachains
- Common good parachains
- Parathreads

h/t @krakenfx

(5/n) Earlier this week, the Polkadot governance enabled the onboarding of the first parachain auction on the Kusama Network, followed by four other auctions. A way to observe the community effect before the Polkadot auctions.

(6/n) Parachains follow a modified candle auction, a popular auction format in the 16th century, where the auction would open with the start of the candle and end once the flame extinguished. Candle auction ensures that no one knows the exact time the auction will end.

(7/n) The auction last for roughly one week. First two days are open phase, the next five days are the ending period. The network utilizes Virtual Random Function (VRF) to determine the end of the auction, which can be before the actual known end time to avoid last-minute bids.

(8/n) The winning project is granted the parachain slot for 1 year, and at the end of the duration, the KSM staked is released back to the participants (if they do not wish to participate further). Projects can also purchase a parachain slot from the secondary markets.

(9/n) Projects can get a slot via self-funding or Kusama's crowdloan mechanism. This is DIFFERENT from ICOs as contributors here are merely lending KSM. If project wins the auction, staked KSM are locked until end of lease, else returned at end of auction.
h/t @DotParachains

(10/n) Polkadot's auction is similar to Kusama with the difference in the lease duration (2 years vs 1 year).
Once the auctions are done, enabling features like XCMP, SPREE, and parathreads will potentially unlock a scalable & interoperable multi-chain architecture.

(11/n) Already @0xPolygon @solana @BinanceChain eating TVL from #Ethereum. Polkadot, in its full functionality, will be a serious contender to the already heated up smart contracts race.
h/t @purestakeco
purestake.com/blog/ethereum-…

(12/n) Overall, this competition is good. Development in the blockchain space is at an ATH with no sign of slowing down. Grants, newer platforms, and increasing education will solve some of the existing issues and bring upon a truly multichain universe we all desire!