Clover Finance Polkadot Auction — What is an Auction & How to Participate
Overview
With the much anticipated announcement made on October 13th, parachains are now officially ready for launch on Polkadot. Motion 118 has been passed by the council to indicate that Polkadot is now technically capable to begin support for parachains. This was followed by another announcement making the parachain auctions official starting on November 11th, 2021. Each crowdloan period for the auctions will last 1 week, and continue until March 3rd, 2022 for all 11 slots. There will be two batches of crowdloans hosted, with the first 5 parachain spots reserved to begin onboarding on December 17th, 2021, and the second batch with 6 parachain slots to be onboarded on March 11th, 2022.
Clover Finance will be technically ready to start its Crowdloan event to participate in the auctions for one of the first 11 parachain slots officially on Polkadot. This will be the first series to explain how Polkadot Parachains work in general and will be followed by more details of the exact incentives.
Crowdloans and Auctions
In short, there will be many projects competing in Polkadot’s parachain auction, where users and investors stake Polkadot (DOT) as crowdsourcing support for their favourite project’s parachain auction bid. In return, reward will be provided by the project based on participants’ contribution proportionally once auction is won.
The crowdloan and auction lifecycle is divided into 4 main steps:
- The community will commit DOT in a crowdloan to their supported projects in hopes of them winning one of the parachain auction slots. This can be done through the Polkadot.js native dapp, through the Clover wallet, or through a participating exchange like Huobi or Binance.
- Projects with the most staked DOT in the crowdloan period through each bidding period lasting 1 week will win a parachain slot. By securing a parachain slot, a project will get the advantage of the interoperability, liquidity of the DOT network, and the security of the Polkadot Relay Chain. This will allow a project to focus on their application needs instead of spending resources on the consensus — whether it is DeFi, Gaming, or any application that requires a blockchain.
- The lease periods will begin on December 17th, 2021 for the first 5 won parachain slots, and on March 11th, 2022 for the next 6 slots. After the leasing period is ended, all of the DOT is returned to the user in addition to all of the project tokens they have earned over the course of two years — CLV.
*Note: If a parachain candidate does not win during one of the auction batches, all of the contributed DOT is returned to the user. - The 96 week leasing period starts after a project wins a parachain. This is the maximum time a parachain can connect to Polkadot before having to re-bid again for their parachain slot. The staked DOT is returned to the user after the 2-year parachain slot period has concluded.
How to Participate
There are 3 different ways to participate in the Clover Crowdloan:
- Directly through the Polkadot.js App
Contribute DOT directly through the native polkadot.js dapp using the Polkadotjs or Clover wallet. This will use the crowdloan pallet built into the Polkadot Relay Chain. - Clover’s Custom Dashboard on Clover.Finance
Participate in the Clover crowdloan directly through the clover.finance website when it is opened. Clover will also issue cDOT, which is a liquid auction based DOT token, representing a user’s stake in the crowdloan . - Participating Exchanges
Participating custodian exchanges like Binance and Huobi are another option to participate directly in the crowdloan, without having to take off DOT from the exchange on to a wallet. *Note: The exchanges mentioned have not committed to including the Clover crowdloan as of this post, please look out for official announcements.
There will be follow up articles to come diving deeper into cDOT, tutorials for exactly how to participate step by step, as well as reward scheme for the Clover crowdloan.
Stay tuned for the latest updates in our social channels here:
https://linktr.ee/cloverfinance
