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Kusama (Polkadot testnet) Parachain Slot Auction (Kucoin simulation)

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Coming up soon (over the next 14 days), the Parachain slots on the Polkadot (DOT) network will be being offered up for auction to the various projects that are aiming to have their network backed by the security of the main Polkadot chain. There are limited Parachain slots up for auction on the mainnet, and there is a wide array of projects vying for the virtual "property".

In order to avoid the ICO pitfalls of the Ethereum ecosystem, the projects will be seeking a crowd-loan of DOT tokens that will determine the winners of the parachain auction. So, basically, invester will lend DOT tokens towards a project's bidding which might or might not result in stake in the project token when it launches. In this way, no actual currency changes hands, which hopefully avoids the security offering pitfalls that various Ethereum ICO projects have fallen foul of.

The parachain auctions are being tested first on the Kusama network, which is the testnet for Polkadot. Unlike other testnets, the Kusama network has a token that actually trades for a decent amount, KSM. KuCoin users can stake their KSM tokens on Pool-X in a simulated parachain auction. You stake your tokens on the Pool-X page of the KuCoin website, and the various stake weightings will determine how KuCoin will place their stake on the Kusama auction.

There are many familiar types of project that are bidding in the parachain auction, ranging from DeFi and AMM projects, through to privacy project and other of the catchy internet of things sort of type of projects.

All the KuCoin users who stake KSM in this manner will take some rewards both from participation ($20,000 in KSM) and from the special KuCoin reward pool ($10,000 in USDT). You will notice that one project has offered an extra reward pool of their own tokens. 50,000 PHA tokens for the Phala Network is the extra prize pool if you stake for their project, with no idea of how much those tokens are worth.

Now, Phala Network is a privacy protection project, so a worthy sort of project, but I do bristle a bit at the extra reward pool... as that will tempt many "investors" to go token chasing rather than actually researching and trying to pick a good project that they want to stand behind. This has been the case in previous KuCoin community vote contests, where one project or another has offered a special extra prize pool outside the contest... which results in token chasers hammering votes for a project that they have no idea about and don't give a crap about! This means that a project is listed over another... all in the name of "crowd wisdom".

So, as I went to back my two projects that I want to win (Acala and Moonbeam)... I saw the rankings for the projects. Surprise surprise, Phala is miles ahead... I guess that will be the extra token offer kicking in for the get-rich-quick crowd! So, best wishes to Phala, but I really hope that Acala and Moonbeam are the winners in the "real" auctions (which means that the rewards would go to me!). I do despair at this idea that "crowd wisdom" trumps everything else... it's only true if people bother to research and educate themselves properly... otherwise, simple bribes will do the trick for most people!

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