Polkadot parachains full of promise, but lack of launch date raises concern
The parachain slot auctions are the next big milestone due on the Polkadot roadmap. So, what can we expect?

Polkadot’s parachain auctions will mark the most significant milestone on its roadmap since the mainnet launch in 2020.

Currently in the testnet on the Rococo network, the next stage of the launch will involve the rollout of parachains on Polkadot’s crazy cousin, the “canary network” Kusama. The rollout of Polkadot parachains on the main network will follow.

What does this mean? The Polkadot mainnet has officially been in live operation for nearly a year now. However, only the central Relay chain has been up and running, with the last 12 months of development focused on implementing the platform’s decentralized governance.

The parachain rollout is the final stage in allowing decentralized applications to launch on the Polkadot network.

However, with the rollout now past its initial rumored release date of Q1 2021 and with almost three months passing since the development roadmap was unveiled, there is still no exact date for when the deployment will eventually happen.

So, what can we expect from this launch, and which projects will participate in the auctions?

How do the parachain auctions work?
Parachains are effectively shards on the Kusama or Polkadot networks, and the purpose of the auctions is to allocate parachain slots to projects wanting to operate on either network.

The overall objective is to have 100 parachains operating concurrently. However, these will open up in batches, with the goal of having around 30 parachains operational within the first year.

Projects wishing to secure a Kusama parachain slot can participate in the auction by bonding their KSM tokens in a decentralized candle auction. These can be their own tokens, but a crowd loan mechanism is available for projects to source tokens from their communities.

A candle auction is a variation on the open auction where no fixed end time is given. This type of auction emerged in the 16th century when a candle was burned to determine the bidding time period.

The idea is to encourage participants to make their highest bids as early as possible because they don’t know when the auction will end. Therefore, it prevents “sniping,” where a bidder swoops in during the final minutes with a winning bid.

Rather than a candle, a random number generator will determine the endpoint of each slot auction once bidding has been closed. Therefore, later bids will be disqualified if they come in after the retroactively determined closing time.

It’s worth noting that the successful bidders won’t “buy” their slots — only lease them, with the total value of the bid locked for the duration of the lease.

Lease durations will be fixed (and the durations may differ between Polkadot and Kusama), and projects can bid for up to four successive periods. Therefore, the total duration of the bid will also be weighted into its value.

At the end of the final lease period, the slot will once again go up for auction.

Peter Mauric, head of public affairs at Parity Technologies — the company behind the Polkadot ecosystem development — said that it’s likely that competition will be fierce. Speaking to Cointelegraph, he said:

“Competition, especially for early slots on Kusama and Polkadot, is expected to be fairly intense, in my opinion..."

"... Because competitive auctions at the start are generally expected, I doubt projects will be severely disappointed, especially considering there is a new slot open every two weeks to bid on.”

Which projects will be bidding for a parachain slot?
In theory, any project can participate in the parachain slot auctions. However, they do need to have a codebase and either hold or have crowdsourced enough KSM or DOT tokens to outbid the competition.

Furthermore, the Kusama Council has stated its intent to award two Kusama slots to infrastructure projects deemed to be for the “common good” of the ecosystem. These are PolkaBTC, providing a bridge to the Bitcoin blockchain, and Snowfork, bridging to the Ethereum blockchain.

Similarly, Statemint, a generic asset issuance platform, has been proposed as the first common-good project for the Polkadot network.

There have already been several projects that have expressed interest in participating. Acala, which aims to become Polkadot’s one-stop-shop for decentralized finance, will be bidding for its Kusama implementation, called Karura.

Moonbeam, an Ethereum-compatible smart contract platform, will be seeking a slot for its Kusama version, dubbed Moonriver.

And Kilt, which aims to bring decentralized credentials in the form of a universal log-on for Web 3.0 applications, will also be looking to secure a parachain slot. All three projects have been extremely active on the Rococo testnet and have active community participation.