Karura Parachain Auction Crowdloan : A DeFi Hub Looking To Secure A Slot On The Kusama Network
Get your Kusama ready to Bond! The Karura crowdloan is rapidly approaching! Very soon, we will be able to participate in the crowdloan, lock up our Kusama, and earn Karura (KAR) tokens. These KAR tokens may become very very valuable as Karura has a very good chance at becoming a parachain.
What is Karura? Karura is the decentralized financial hub of Kusama. The blockchain, optimized for DeFi and powered by KAR, was built to enable scalable financial applications with micro gas fees and communication with other networks on Kusama, Polkadot, and beyond. As a live network with real economic incentives, Kusama will serve as an additional proving ground for parachains, allowing the community to observe network effects and conduct further testing and optimizations.
Wait a second… Crowd Loan? I’m confused… So how does a crowd loan actually work? Checkout The Crypto Lifestyle’s video here and read on. It’s quite simple. KSM holders lock their tokens on Kusama for a period of time (6, 12 or 24 months) to help Karura lease a parachain slot and gain access to Kusama’s plug-and-play security. In return for KSM holders’ loan, KAR (Karura’s native token) will be distributed to participants. Tokens will be returned to holders following the parachain lease that the user agrees to, with a guarantee of receiving the KSM principal back. It can be seen as a community-backed launch for individuals looking to contribute to the evolution of Kusama’s network and parachains. The crowdsource is entirely done in a trustless and decentralized manner.
For every Kusama that you contribute, you will receive AT LEAST 12 KAR tokens. Essentially, what you are doing, is providing a loan and at the end of the loan period, you get paid your principle Kusama back and receive interest in KAR tokens.
Many may have heard that the Parachain Auctions are right around the corner, but wondering… What the heck does that mean?
Well, we all know what an auction is so think of it this way… Each Parachain slot is up for Auction and the highest bidder for the slot wins! To fairly determine which blockchains get to leverage the Kusama or Polkadot relay chains and their distributed computing power, the networks use Parachain Slot Auctions.
Parachain slot leases will be allocated via non-permissioned candle auctions. This will be a blast and will feel like a sporting event as we’ll be able to watch the auctions happen live! After the first auction on Kusama, there will be a new auction taking place roughly every two weeks. After each auction, the winning parachain will be deployed to the network at the beginning of its lease period. Auctions will continue from here on a rolling basis as more slots become available and previous leases expire.
We are approaching the first crowdloan, and to give a visual of how the timeline works see above.
To give a little more detail on how Karura plans to get a spot in the auction, here is how the 3-step process works:
1) Gaining a slot on Kusama — Kusama is a multi-chain network based on the Polkadot code that allows blockchains to connect for interoperability, scalability, and plug-and-play network security. To gain a slot on Kusama’s network, all parachains must win an auction. Karura is crowdsourcing KSM to use in the upcoming parachain auction.
2) Crowdloan module to bootstrap Karura’s parachain auction — Karura’s crowdsourcing event will be used to participate in the Kusama parachain auction. In return for the KSM contributed by the community, Karura will issue KAR, Karura’s native token when Karura wins the parachain auction. Learn more here.
3) Karura launches after winning the auction — After a successful auction, Karura will launch our mainnet on Kusama following the auction and become an the DeFi hub of Kusama as planned. Learn more here.
It is important to emphasize that it is time to register right now through the Acala Network website. You do not need to contribute just yet, but you will receive an email that will notify you when the time comes. For an extra juicey 5% in KAR tokens, use The Crypto Lifestyle’s referral code. There are already 11,942 people registered!
Till the next Medium, you’re on your own. Laaaaatteerrrrrr.
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