Polkadot’s Ecosystem Could Have Its Biggest Year In 2022

Polkadot’s ecosystem could have its biggest year in 2022 thanks to the success of the Kusama parachain auctions that paved the way for a mainnet rollout as we can see more in today’s altcoin news.

Polkadot’s ongoing para chain rollout is a final launch phase of the multi-chain sharded architecture after rigorous testing, auditing, optimization, and other works that were carried out on testents like Rococo and Kusama. The first indication that Polkadot parachains were afoot come back in September when Gavin Wood hinted they were ready for a launch. This was followed in October with a motion for the Polkadot Council to open the network’s first parachain slot auctions which were approved by on-chain governance and increased the buying pressure for DOT in the run-up to the launch.

Parachains are custom blockchains that are anchored to Polkadot’s Relay Chain for 96 weeks at a time with options to renew.
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Each slot is assigned by the on-chain candle auction mechanism with projects that want to bond in DOT for the time of the lease. Parachain teams can fund the auction bids with the help of a crowd loan campaign that will enable the acceptance for contributions from DOT holders and will show demand for the project’s idea. Crowdloan participants will get their DOT returned with the parachain teams being able to choose to reward them with projects’ native token.

The crowd leans and auctions differ from an initial coin offering, IEO, or DEX offerings since the holders are not compelled to transfer the control of their DOT in exchange for the tokens of the project. There’s another big difference as well which is that the project team cannot use DOT at their discretion or sell it on the market but they can benefit from access to scarce network slots, parachain token launches, and fee generation opportunities.

Polkadot’s ecosystem could have its best year in 2022 as the number of tokens locked up highlights how many of the participants are invested in the success of the projects compared to the speculative structure of the offerings which could lead to bigger project accountability that have to deliver quickly on their applications because of the strict 96-week leasing period. The balance of incentives between participants and projects saw over 205,000 contributors take part with more contributing via exchanges like Binance.