Polkadot Decoded 2021: Auctions, and Crowdloans, and Slots, Oh My!

now that we all have the latest on the tech behind para change and where it stands let's talk about how you actually get a parrot chain uh see polka dots architecture is brand new the ability to own your own shard on a network like this is revolutionary for many reasons but the fact that it allows because of the fact that it allows us to cleanly segment and allocate bandwidth on on the network which is which is really a a new innovative approach to sharding that will allow us to build optimized customized block chains and secure them to polka dot in order for to allow these pair chain slots to be acquired fairly and permissionlessly we use an innovative twist on an old auction style called the candle auction which sean will explain in this next talk uh parody core developer sean deprizy will let you know everything you need to know about uh how your parachuting community can acquire its place on the relay chain you're up sean thank you peter um yeah we have a lot to cover so let's jump right in um i do warn i have been known to talk a little bit fast in the past um i'll try to keep it slow but i apologize in advance um but yeah i'm very excited to share with you everything about auction crowd loads and slots um so yeah um first a little about myself my name is sean tabrizi and i'm one of the core developers working on substrate and polka dot um i learned about ethereum back during my time at microsoft um and i immediately became obsessed with smart contracts in the blockchain world i was looking for opportunities to continue to innovate in the blockchain space so i actually quit my job microsoft to join parity technologies about three years ago i'm one of the developers that designed and implemented the auction cruddling system so again i'm really excited to share with you all about it and actually to have you use it in the very near future um but before we jump in um let's review a little bit about you know polka dot and what it offers um i guess first thing to note is that polka dot really has a vision towards a multi-chain future but let's break down what that actually means um if we look back a little over 10 years ago we had the creation of bitcoin which is really the first public blockchain in the only chain of relevance at that time it wouldn't be for another six years until ethereum went live and provided a platform for multiple different teams to build their products on blockchains as well ethereum was really the start of a multi-token future with people launching their own tokens building smart contracts having them interoperate with each other but we've seen firsthand that this kind of structure doesn't really scale well um if we look at the current blockchain landscape we find there are instead many many teams building layer one blockchains with specific functionality in mind for the problems we're trying to solve um and this is where polkadot comes in pocket is actually a layer zero blockchain which can connect together these layer one solutions pretty much unlike anything we've seen in the past and we believe that the future of web3 will have many blockchains and that polkadot really is a platform which will facilitate and enable that vision um but the multi-chain future is not a really easy one to reach um there's ultimately a bootstrapping problem i mean the blockchain community today is not that big yet and each new layer one blockchain that goes live kind of pulls from the same pool of people to try to build up support um teams can struggle to get backers for their project recruit node operators that secure their chain um and the chains themselves have to basically struggle to support interactions with existing and even future blockchain systems it's just it's a problem that's very very hard to solve um polkadot solves the resource problem by providing shared security to all the parrot chains so polkadot itself will incentivize and collect validators who will be assigned to different pair chains and validate their state transitions um this means that when you join the pokemon network that we basically provide to you bitcoin level security um to your chain at basically no additional cost and then of course poker also solved the problem of cross-chain communication and blockchain interoperability um whereas the blockchain world is much like the wild west you know you have everyone designing their blockchain protocols based on the back of a napkin um polkadot provides a clear upgradable and scalable standard for pair chains so with tools like xcm and xcmp every single pair chain on polkadot will immediately get access to interoperate and communicate with their peers um and with bridges of course of things like bitcoin and ethereum polkadot will serve as a gateway to all the information of all the information available on the decentralized web but you know not everything is sunshine and rainbows unfortunately even polka dot has its own resource limitations um adding new pair chains to polka dot is itself an exponential scaling problem so there's really only a limited number of perishing slots we can actually give out and have run on the relay chain um we do have a long term plan for how we're going to solve the scaling problem through the use of nested relay chains so you can imagine a chain similar to polka dot a relay chain but connected to polka dot as a para chain and so if you can imagine nesting these you can continue to scale this decentralized network um but that's for the future and in this presentation we're going to talk about kind of how we select the lucky pair chains that will connect to polka dot network today so for that we're going to talk about slots let's go for it so slots is the term we use to describe availability for a pair chain to connect to polka dot um optimistically we think that up to about 100 pair chains could be supported at a single time on polka dot and for that we would need a hundred slots um now not all pair chain slots are created equal um there will be somewhere between 10 and 30 what we call common good chains um these are basically parrot chains reserve a utility to the whole polka dot ecosystem so you have things like bridges to bitcoin and ethereum um utility chains like statement which will act as a multi-asset para chain for the whole ecosystem and even system level pair of chains which will move logic off the relay chain i think rob tackles a little bit in this last talk but you know things like balances staking in governance we can move those to pair chain systems and free up resources on the relay chain so the relay chain can focus all of its energy on providing the best services to the pair chain ecosystem and then of course there'll be around 40 to 90 lease slots which will be auctioned off this is the main focus of this talk so i'll go more in that detail later um and finally we have pair threads now parathyroids won't be available right away um we already heard a little bit about it um but the idea is that any additional availability which pokemon can support can be turned into a parrot thread slot where anyone can bid to produce a block on polka dot and basically have a pay-as-you-go system where people can just try it out um and so again all these different slots will allow you to fully saturate the use of polka dot but um while we have plenty of amazing teams excited to get pair chain slots and we aren't going to get to 100 slots overnight um instead what we'll look to do is actually slowly ramp up the network by introducing new slots and new pair chains over time as long as we're seeing stability on the network you can expect this to continue to open up and scale new slots um but it's not something that's going to happen just you know instantly so the question is then how do we open up new slots and for that we need auctions so um auctions on polkadot are basically auctions for a pair chain slot um each of these slots will actually be for two years in length and they're broken up into eight pieces called lease periods and each of these lease periods will be three months long um this means actually an auction you can have up to eight winners you can imagine that every single winner gets a different section of this two-year period or you can have a situation where a really good bid um bids for all of the lease periods and then one pair chain gets the entire two-year slot but basically every auction provides um two years of availability on polka dot for you to bid for um on kusama this is going to be a little bit shorter so the slot duration here is only 48 weeks which is approximately one year and then the least periods are only six weeks long and of course we do this a little bit faster on kusama because it's a canary network for polka dot and so we want to see all of these state transitions of pair chains and stuff happening more quickly you know to make sure that everything is running smoothly and that we we're expecting everything we expect now there's a lot of different ways we can approach the auction system but we actually settled on a candle auction system um the candle auctions were popularized in the 17th 18th century as an alternative to the english auction so you probably are familiar with english auctions where basically each person bids higher and higher until no one wants to bid anymore um the candle auction adds to this process a little bit of randomness so you can imagine an auctioneer would actually light a candle and then start the english auction process everyone would be bidding but if the candle ever went out the auction would immediately end and even if there were more potential bids whoever made the last bid would win um this means no one exactly knows when the auction would end and because of that the process encourages bidders to make each bid as if it was their last and this of course encourages really healthy price discovery early and discourages last minute sniping so you know people jumping in last minute making a huge bid and throwing off all the economics now if you're familiar with blockchain systems you would know that um anything involving randomness is not very easy so this is actually how we implemented the candle auction system on the blockchain so the auction is broken up into two main parts first we have an opening period which is right after when the auction has started and this allows some teams for um teams to collect themselves um to set up their initial strategy make initial bids and to see who the competition is and then we quickly transition to an ending period where the auction could end at any time and the winners are decided um but the way that we manage the the random ending is basically we actually go through the entire ending period and each block during the ending period we capture a snapshot of the current winners um we keep that snapshot all the way till the very end and then after the entire ending period is over we actually retroactively generate some randomness using a very verifiable random function to then select which of the snapshots was actually the end time of the auction and of course who the winners are that means that even though during the auction process there may have been better bids than the selected snapshot that snapshot which we randomly selected will be what we use to select who the actual winners of the auction are um so it's also very important to note that when you bid an auction you use dots but you're not actually spending those dots to an auction you actually just lock them up for the duration of a slot which means when the slot is over and your pair chain is you know off boards or wants to continue later you get all of your tokens back so when tokens are locked up you can't do things like staking or voting or transfer or anything like that um but that also means really the only cost for being a para chain is actually an opportunity cost so basically when you're bidding in a pair chain auction you're saying that the value you can bring to yourself and to the network is more than what you could get for staking for example and so it's really i mean it's super exciting to know that you can become a pair chain and not really have to spend any funds um now bidding is a little bit more complex than you might think um so let's look at a hypothetical snapshot from the ending period which i've shown here um so you can see there isn't just one bid with one winner but actually multiple bids happening at any time remember the slot is broken up into eight lease periods so when you have bids any bidder can select among those lease periods which ones they want um you can see alice at the top is bidding for all eight lease periods um and is willing to lock up 200 dots for that whereas bob only wants lease periods one and two is only wins lock up around 100 dot now when we actually evaluate everyone's bid we don't take it at face value we actually increase the locked value based on the amount of time they've locked it up for so you can see if alice is bidding for eight lease periods um and is willing to lock up 200 dots those two dots will be locked up for a full eight lease periods so the locked value is two times eight sixteen hundred um dots in locked value um again bob only with a hundred dots for two these periods only has 200 dots in locked value um on top of that we actually pair bidders with each other so that we can fully saturate the least periods so you can see that alice of course would satisfy all eight least periods by herself but um bob and charlie would need to uh combine themselves together in order to um completely saturate the full eight-lease periods so we'll actually look at bob and charlie's bids together when we're making the final evaluation um and then if we look at the final evaluation we sum up to all the locked values we would see that in this auction bob and charlie will be the actual winners um and if we look neither bob nor charlie actually made the highest bid but it was the fact that their overall lack value was the highest that allowed them to become the winner does this make sense right cool and so then now we understand how auctions work let's chat about crowd loans which is i think one of the most exciting things that we can definitely offer in this presentation so what are crowd loans so crowd loans is a fundraising system for parrot chain teams to get the dot needed to win pair chain auctions basically dot holders can loan pair chain teams tokens which will be used to bid in these pair chain auctions um to encourage users to loan tokens to them perichine teams can incent create incentives basically you know a common example of this might be distributing their own token to the crowd loan participants of course this is only a loan right so just like the auction process all problem participants all dot holders will get back their original contributions at the end of the slot we guarantee this with the logic on chain thus um participating in a crowd loan is again just a cost of opportunity it's something you definitely want to do um so what does this mean this means that crowd loans on polka dot means that you don't have to have big pockets to become a pair of chain just big ideas if you provide the great ideas a solid engineering team a little bit of hard work uh polkadot will provide you everything you need to get to production i mean we've already talked about the shared security it provides to the different teams but now it's clear the protocol even supports collecting the funds needed to win these slots via crowd loans and then as a dot holder a crowd loans are an amazing way for you to shape the future of the network you can back the perichine teams which you think will provide the greatest value you can even get some of the pair chain tokens or other awards along the way and remember all of your problem contributions are returned to you at the end of the slot so there really is no reason not to participate and finally as a parachute team you know crowd loans is a great way to decentralize your token supply on day one like we know it can be very hard to build a new and diverse community when starting a blockchain network um when you join the polkadot family you jump right into the middle of one of the biggest blocking communities there is and then crowd loans gives you a stage to convince people in the poker community to support you and by distributing your token you can actually get them personally invested in your success as a parent chain so it really is a win for everyone so now that we've covered all the basics of slots auctions crowd loans let's see what you should expect when we actually uh go through this process exp you know um besides a little bit of chaos of course so here's a general auction timetable and give you an idea of kind of where we are and what you should expect in the near future so at the high level um you saw last thursday we onboarded and got the shell parachain running on west end on friday we actually upgraded kusama to support all of the pair chain registration auction problem process so that's already there on kusama um then this monday we actually on board the shell parachain tukusama as well the next steps will be coming soon um which involves upgrading the shell parachain to state mine which is the which is basically the assets pair chain for kusama it's like statement but it's for kusama and then when that is running well and stable we will announce the official auction schedule and of course give you all seven days notice so that you can unbond your ksm if they're currently being staked um the auctions on kusama will be seven days long with a two-day opening period and a five-day ending period this should give everyone plenty of time to build up their uh bids and their crowd loans and for participants to join the crowd loan process and the auctions on kusama the auction schedule tentatively we're looking to start with around uh five auctions um each done one at a time and each one week apart now since the auction link itself is one week these auctions will basically back to back to back um each auction will target the current lease period so as soon as a winner is picked in an auction you will start seeing that pair chain immediately start to onboard and you basically should have that pair chain building blocks that day which is like i mean kind of crazy to think about how close we are going to be to pair chain teams really launching on kusama um for participating in crowd loans we have the poke.js apps which will provide you basically all the tools and things you need to participate in crowdload and hopefully you all are very familiar with the poke.js apps already um so if you go to the network tab then parachains then crowd loan you should be able to see all the active crowd loan for partition for potential pair chains um here you can observe the different options and configurations for each of the crowd loans um this isn't all the material probably you'll get additional material from the actual pair chain teams talking about the incentives participation and types of change to their reward curves or anything like that um but that combined with information on the crowd loan dashboard should provide you all the information you need to make an informed decision let's take a quick look at the screen um you can see here that our four crowd loans um bob's is already completed because bob has already reached the limit of the amount of funds that he was looking to raise for his crowd loan so there aren't any more contributors allowed in that um you can see that charlie dave and alice still have crowd loans going on and each of them have different lease periods which they're bidding for and of course also a different ending time for the crowd loan so this ending time is very important to note because when you contribute to a crowd loan you're kind of saying um my funds will be locked in this crown loan process until either um the uh crowd loan wins and then of course your funds will be locked until the pair chain off boards or until the crowd loan is ended and then you can contribute into a different spot so you need to take into account um the different ending times for these crowd loans before you participate and then of course you can see how much they're looking to raise and how much they've already raised and this could inform you on decisions like you know if they're trying to distribute their tokens how much of uh of the tokens you might get based off of a contribution you make you would make um and then of course once you've got all the information you made an informed decision you can just press that very easy contribute button on the right hand side and then say how many dots or ksm you want to contribute and press ok and that's it it is really that easy to uh contribute to a crowd loan keep going yeah and so um after the crowd um contributions are made and the bids are made we actually need to go pick a winner and depending on what stage in the auction process the current winner will show up differently so if you're trying to look and follow the um the auction process it's important to know what the different kind of winner um snapshots may look like so um during the opening period the winner view will be very simple basically whoever has the highest bid for a particular lease period section um will be listed if someone bids higher or a crowd loan gets more funds you'll see that an old name disappear the new name pop up this is very very simple um but then we'll move into the ending period remember the ending period has these different snapshots for all the different changes of bids so you'll actually see multiple groups of winners with the block number associated with that snapshot so as we'll make new bids new snapshots will appear and you'll kind of get this this list of all the different possible states for winners um any of these snapshots could be the potential winner for the whole auction we won't know until the ending period is over finally once the auction has completed um and the randomness seat is generated to pick the winner we actually picked the snapshot um the winners decided we run the algorithm and decide who are the best candidates for that snapshot and then you will actually assign the least periods as you can see on the screen we have bob and charlie who won that auction and their lease periods are assigned to them and even the pair chain itself may start to onboard if the lease period is current so now that we've covered all the basics of crowd loans and auctions let's go over some of the do's and don'ts um first you definitely do want to listen for announcements to unbond and stake your staking ksm or dot when it comes time to start participating in these auctions and you absolutely want to investigate and research the pair chain teams before contributing to any of them um remember that this is a completely open and permissionless process so you could expect there probably will be teams with malicious intent out there trying to you know lock up your ksm in some you know not worthwhile auction so you you know in order to get to where we got today we've worked with a lot of um different test networks like rococo and we've had plenty of opportunity for the teams to show the world that they have everything running and working smoothly so definitely you want to make an informed decision and do research on these teams to figure out how have they been doing with the um the roku test net and setting up their code in the incentives they're trying to provide right you definitely don't want to transfer tokens to another person to participate in the part on the current process you basically it should be done by you directly um on chain um and also you definitely don't want to lock up all of your funds in the first crowd loan remember that you know many teams will be doing crowd loans and those crowd loans may start at different times if you lock up all your funds on the first crowd loan you won't have funds to contribute to the other one so definitely think ahead of time about the power chain teams about the allocations you want to make and make sure that you're distributing your funds in a way that makes sense and allows you access to all the different opportunities that poconos can provide to you yeah so to recap we talked about pair chain slots allowing layer 1 block chains to access the polka dot ecosystem auctions which is the mechanism used to determine which pair of chains will actually get one of these limited slots um crowd loans of course a mechanism a mechanism which allows dot holders to not only shape the future of the network but also get a piece of the action of this growing polka dot ecosystem and so it should be clear now why polka dot is the best platform for the web3 future i mean we've designed it to attract the best and most innovative engineering teams we've minimized the requirements needed to get to production and we've fostered an active and diverse community who can directly participate and shape the ecosystem i mean really what more can you ask for um and i guess i will find out what more you can ask for because i'll be taking questions with peter now so thank you thank you thank you very much sean yeah of course we have a few questions a few things that you sort of touched on a little bit that we can go into a little bit yeah more deeply i think the first one everyone's asking is like when parachain so you sort of explain the process we're gonna get state mine have this shell upgraded to like the full first pair chain on kusama yeah it's like where are we with that and how long after that will we know what the auction schedule is yeah um my understanding is that actually we have a pr ready to be and if that's looking good we will of course as soon as we can upgrade um to the state mine parrot chain um that would be really exciting of course it'll be you know um not only a new tool for the ecosystem to use but a way for us to check the stability of the network and make sure that when we onboard future pair of chains that they're not gonna you know hit any roadblocks um once we feel confident there you should expect to see the auctions you know announced the schedule and then we can start things right away imminent i do believe is i think i put on my slides soon you know trademark classic crypto nomenclature soon um so there's some interesting questions here in the chat should be actually pretty straightforward um one's actually interesting and uh you can touch on this concept of common good para change someone asked do pair chains have a two-year life maximum for example if the ethereum bridge was auctioned as a para chain it would only have a two-year life wouldn't this cause huge instability to the ecosystem it's a great question so the common good pair of chains actually have a different type of onboarding process than what we've described here today so i've described the auction process which is a public system for any pair chain team to collect funds and get a slot but fortunately polkadot has a very active and very strong governance system and through governance we can actually go ahead and evaluate common good power chains and onboard them directly with and skipping the entire auction process so things like bridges to polkadot and ethereum i mean of course they're going to be relevant for years to come we will continue to support them through governance motions and make sure that they have a parrot chain slot this is the same thing we're doing with state mine with other system level pair chains all of those things we have a mechanism through governance to enable those slots yeah that's great and i think someone will probably drop into the chat a uh blog post written by joe petrowski on common good parent change sort of describing of course the parameters what that means they'll sort of permanent chains that aren't really ever going to go anywhere providing this basic level functionality so whether it's offloading the staking from the relay chain because we want more pair of chains offloading balance transfers of dot onto a pair of chains we don't want it on the relay chain and then more sort of broad utility chains like statement which is allowing anyone to mint assets um there's some conversations around like basic smart contract pair of chains just to have like i think one of the uh examples or analogies that's been used before is like when you get a iphone it has apple maps on it no one uses apple apps necessarily but it's always going to be there so if you get a fresh phone and you're lost you're going to have a maps app you're going to have a calendar app you're going to have email so the base level functions that you might want out of one of these ecosystems will always be there but there's nothing to stop a community para chain team from taking that to the entirely new places that we didn't expect from like you know the baseline yeah i would definitely also check out joe petrowski's talk tomorrow on common good para chains in the uh uh stage one after our initial uh conversation tomorrow yeah and just to add to that a little bit you know i think that this is actually one of the great things we can start talking about um right now which is you know like what kinds of things do the community see as valuable common good para chains and are there even opportunities for example for a pair chain who has won a slot to provide so much value to the ecosystem that maybe transition to become a common good chain like these kinds of things are you know very valuable questions and discussions we can start having already in our governance systems yeah key point being common good chains generally have to operate at the token that are sort of powering them uh generally would have to be dot or ksm so could get a little bit sticky for pair of chain teams that launch with a native token and then say hey i want to be a common good chain now there's like probably a little bit of a bigger conversation that they'd have to have with their own community but regardless like an entirely new set of concepts and and trade-offs that we're all going to discuss as a community is really exciting exactly getting into that over the next couple years here's a good one um about sort of making sure that you're staying safe obviously like you mentioned there's crypto there's scammers everywhere there's obviously a lot of enthusiasm around polkadot so those who have less than great intentions are likely to either use the brand or a lack of of deep knowledge around these processes early on to try to take advantage of people so uh this this uh anonymous uh the ass i guess the account you use to support a crowd loan needs to be super secure right as you won't be able to move the funds if your keys get compromised so um that actually that could vary depending on the crowd loan process so one of the things i didn't mention but we have as a feature in the crown process is a memo and so um we actually have um you know attention pair chain teams like a moon beam for example which aren't using the standard substrate um cryptography and are using ethereum cryptography so the question might be like if you contribute with a polkadot account how are we going to map that to your ethereum account on the moonbeam network right and so we actually have this additional memo field where if the parachain team supports it you could put into that the actual target address that you would want to um you know have the funds minted to for that um pair chain token and the ones will actually go there now that of course will vary on a per um chain team but that's one way you can mitigate or you know maybe separate the um the different keys you're using of course just like any other uh key you definitely want to keep the key used for crowdline secure because again when the crowdline is over all the funds will be returned to that key so that's definitely very important um and then beyond you know other things keep safe i think we actually have a really great blog post i'm sure someone will post it in chat or things you should watch out so the only thing i can really say um to keep safe as an overall thing is of course managing your keys but also doing you know good research into these teams i mean all the teams usu that um are part of the ecosystem are active and um they communicate well with the community and they have shown evidence of the fact that they're gonna be successful on polka dot when that when it happens so uh coco is key exactly exactly so um basically you know you need to just do your due diligence don't ape into every single thing you know make sure that you that you feel confident in what you're doing and you and you know that um you know where you put your um your dots is actually a vote it's you're really shaping the ecosystem so it's not about just putting it everywhere it's about where do you want to see um the first perching teams and the first you know polka dots kind of evolution to happen like you can push people in that direction with your tokens yeah voting with your with your uh stake in the network exactly the direction you want to take it is very very interesting um and and it's really completely new i like the ideas like just don't ape into this yeah actually think about it i know a lot of uh crypto enthusiasts out there are used to this defy just throw it in and hope something comes out i would really hope that people uh think a lot because that's the other point you mentioned was really important is like if you have all your dot in the first crowd loan and that team wins is like that's that's that's that's it for you and you know you may that may be the right choice for you if you're really a huge supporter of one of these early parochian projects but i would say you know worth uh uh of not putting all your eggs in one basket so to speak even though you do get your eggs back at the end of the yeah but again you get it back but you know it's gonna be a while like if a pair chain wins a slot and says say assume they win all eight lease periods it's gonna be a year before you see those dots again yeah right so this is uh leads into another good question someone had so if the company you've contributed to or let's say the parachain community that you've contributed to in their crowd loan loses the auction that they're going for yeah what happens maybe you can talk a little bit about like a crowd loan could be for multiple options yeah auctions or what and if eventually they don't win at all what happens after that right so i had mentioned that you know we're tentatively thinking about doing about five auctions to start with um and they'll all happen for the current lease period so um basically um all the teams could basically create their crowd loans as a five-week crowd loan and then um as long as they set their lease periods correctly you can imagine that basically um contributions to any of those crowd loans would try to participate in every auction so it may be that a crowd loan doesn't win the first auction but as long as it's still active it hasn't ended yet again they can set the end date um it can actually bid in the next auction the next one after that so um these different crowd loans can actually span multiple different auctions now if a team wins one of the um one of the auctions with a crowd loan immediately those funds get locked and you know you're basically locking your funds for the duration of the pair chain slot but if um over the entire problem period they don't win anything those funds are immediately unlocked to you and you can start contributing the next set of crowd loans whenever those happen again yeah um one thing that's important is that you do need to take into account again that ending date of the crowd loan so when you contribute funds to crowd loan you're basically saying no matter what the outcome could be the minimum amount of time i'm going to lock up my funds is the duration of that ending period so you may if you're if the community the parent chain team you want to support doesn't win the auction you're going to have to be sort of on top of it and say all right they've opened up a new crowd loan contribute funds to to to the new crowd loan or other crowd loans so that you're able to participate if it when they do actually win the slot exactly here's an interesting one i haven't gotten before pretty simple to answer but worth worth asking how does the stake dot in a crowd loan or should say yeah the the bond can trip does it contribute to the market cap of the parachain and if not how is the para chains market cap understood yeah so that's that's that's kind of a heart answer is no it doesn't have some influence over the overall polka dot ecosystem and network which that is potentially has some impact on how you know parachain the value of pair of chains broadly in the in in the market so again because the because the tokens you lock up in um in the auctions get returned to the users it's not quite fair to say like um i i locked 10 dot into this crowd loan i got minted 10 whatever and that has one to one backing because at some point those those 10 dots will be returned to the user and you still have those um you know those pair chain tokens yeah so it's up to the pair chain teams to drive their own value by contributing valuable code and resources to the to the to the network um now of course market caps are decided by lots of you know um open ecosystems and economies and stuff like that but um it wouldn't be right to say that's like a one-to-one mapping between the dots that are locked up for a pair of chain and the value of that pair chain itself the value of the protection we derived from the value it brings to the network yeah um so here's an interesting one and maybe we can use this uh before we wrap up to talk about some other like wilder scenarios there's a couple here one is like will teams be able to stack parachain auction slots so like imagine a very well-funded team with a really big community um you know their slot is coming in at into an end so they're like pre-bid for a slot so there's like overlap so they always have a full pair of chain slot and if not i think maybe you could touch on the use of a pair of thread in between that of course yeah so i mean what you mentioned is exactly right so basically um we you know onboarding and off-boarding pair of chains is kind of a kind of a scary thought you know imagine one day you have a pair chain slot and the next day you don't that would be kind of weird for the team um absolutely we support um basically um you um winning um future auctions for slots you haven't had yet and if you know the end of one um slot you won and then the beginning of the next thought you wanted is just you know next to each other you would just continue to run continuously there would be no off-boarding no no weird blip or anything right um you can even imagine that during the auction process um you might not be ready to launch your pair chain at the very beginning of the lease period we want so you're only bidding for let's say the last two pair chain slots and then when time comes around um for more pension slots and more auctions you can start bidding for that and basically extend your own lease period to be however long you're able to get it now let's say that for whatever reason there is some kind of off-boarding so you don't have a continuous lease period um when your pair change slot is over we will downgrade back to a pair thread now pair threads again aren't really available currently um but hopefully by the time that you know people are off-boarding for the first time they will be available um and basically at that point you can just continue to run your um pair chain as a pair of thread so you may not get that same availability of making a new block every single relay chain block but you can still produce new blocks through pair of thread auctions you know there's just kind of an auction that happens in real time trying to get access for one of those two pair thread slots so it's not that if um you lose your slots that immediately your chain is dead it's very much we have a plan for people to be pair threads to transition off and then wait till they get another pair chain slot and on board on again like this is a really great story of um what parathyroid can provide the network yeah and a really nice sort of like uh sort of life cycle for a product exactly we talk about um and i think derek from moonbeam i talk about this later today um sort of the path for each team to be a para chain like people think like oh i want to build on polka dot i have to build a pair chain that's not actually necessarily true you can start in a smart contract environment on a para chain iterate your idea build a community and then say all right we're ready to build this in a more optimized efficient manner as a para chain using substrate start out as a pair of thread and and actually start to sort of uh prove out your your code and then once you have proven it out and and sort of ticked all the boxes be in a position where the polka dot community is willing to help fund your crowd loan and get your full slot because you they see you as value to the ecosystem yeah and then you know voting with their feet so to speak yeah again it's all about the options we provide our our in community lots of options on how they want to participate interact and use polkadot so those options really allow you to tell whatever story you think is best for your chain for your community for your people yeah um sort of building on the kind of team stack pair of chains another person asks like how do we prevent people or teams or organizations with really deep pockets from just winning all the auctions and and again and acquiring all the pair of chain slots for themselves right so um one that would be very impressive i i don't suspect i don't suspect that getting a pair of chain slot will be very cheap and if those guys have that big pockets then i mean good for them yeah you should call me but basically um you know one you can't um you can't reserve more than one slot for a parrot for a pair of chain so if you have a certain pair of chain id um which is you know how you basically back a pair chain so your pair changes are presented by id this id is very important it has like all of your messages associated with it all the you know validators are selected to help validate your chain all that kind of stuff you can't have two slots the same pair thread or the para pair chain id um so that team would need to launch multiple different paratrades if there are able to do that and all these pair chains provide value then you know great i mean i honestly i see that as a as a positive thing i mean i wouldn't say it's a bad thing for for one developer team to have for example two pair of chains as long as they're providing unique value if they're not providing value then really the economics of the entire situation is bad for them like they're going to be locking up a ton of their tokens not getting staking rewards not being able to vote in governance not able to transfer them to basically get a slot that's you know like trolling the community i mean that doesn't make sense it's an economic decision they'd be making on not enough data at this point i think maybe once we have 50 or 60 pair chains connected to polka dot there might be a better understanding of like what a secondary market for parachain slots look like and you know at the 80th parachain people aren't going to be bidding nearly as much dot because so much will already be locked in the network the core functionality for pair of chains will be running in existing pair chains so yeah again but all super exciting scenarios that i'm going to really enjoy both watching analyzing and hopefully participating in as well i'll say as a runtime developer one of the exciting things about all of these processes especially you know showing them to the world and having you all use it is that we design these um these uh applications with certain incentives in mind to try to encourage certain behaviors but um really once we put it into your hands it's kind of we have to guess actually actually how those incentives actually affect you and are you actually doing the right kinds of um actions that we would want for example um so you know i wouldn't be surprised if there are future iterations this code and again with substrate with polka dot with these um four question time upgrades we're actually able to tweak and iterate on the code here for all the auction system so if we find some weird behaviors it's nothing that we can't solve right once we've identified them the beauty of on-chain governance exactly fantastic sean thank you so much for dumping everything you know about crowds loans slots and auctions oh my

Channel: Polkadot

Views: 4,852

Rating: 4.9626169 out of 5

Keywords: parity technologies, crowdloans, parachains, DOT, KSM, polkadot, kusama, web 3.0, web3 foundation

Id: qGjCYl2awkM

Length: 38min 45sec (2325 seconds)

Published: Fri May 28 2021

Reddit Comments

[u/[deleted]]

Mine was finding out about Gavin Wood, who he was and his history added with the vision and roadmap of Polkadot.

[u/Accomplished_Mess116]

Very well explained in the video. I love DOT and ALBT. Both are solid projects. Heard of the dot Intergration as well

[u/fr0st2k]

a 40 minute video...ok