The native token of the Polkadot blockchain, DOT, tapped a new all-time high price as the highly anticipated parachain auctions for the network approach.
The long-awaited launch of parachains, or side chains, on the Polkadot network is almost here. The momentum has driven prices of DOT to a new all-time high of just over $50 on Nov 1.
Just like its “canary network” Kusama, crowdfunding and auctions must be held for projects vying for a parachain slot.
On Nov. 1 the Polkadot team tweeted that the motion to enable parachain registration and crowd loans had passed council and gone to a public referendum.
“If passed, parachain teams will be able to register their parachain and open their crowdloan on Nov 4, 2021 at approx. 19:15 CET.”
Polkadot announced that it was finally ready to begin auctioning parachains on Oct 13. The first auction is scheduled to commence on or around Nov 11.
Parachain contenders ready
The crowd loan process enables competing projects to raise funds in DOT tokens to bootstrap their parachain auction. The auctions themselves work on a candle system with the winner being the highest bidder randomly determined at the time when the candle goes out.
Those supporting the project will need to lock their DOT tokens into a sponsored account for a designated period. Rewards for doing so are usually airdropped tokens from the project competing in the auction.
There are a number of projects vying for the first slot such as Ethereum Virtual Machine compatible platform Moonbeam which allows developers to port from Ethereum to Polkadot with minimum fuss.
Other winners of the first 12 Kusama parachain auctions are also likely to be among the first contenders. According to Parachains.info, there are more than a hundred projects in total, though only 12 have actually won auctions for Kusama parachains.
On Oct 19, Kusama approved another 48 parachain auctions over the coming year so testing and development will continue on Polkadot’s sister network. It held its first one in June.
DOT flips XRP
The momentum has driven DOT prices to a new all-time high of $50.87 during late trading on Nov 1. At the time of press, DOT had retreated slightly to $49.84 but was up an impressive 17% on the day.
DOT has made 55% over the past month and briefly flipped the market cap of XRP at $52 billion, taking the seventh spot. Although it has fallen behind since then, now trailing XRP by around $500 million.
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