coincodex.com
Key highlights:
- DeFi project Karura has won the first parachain slot auction on Kusama
- The project has won a 48-week parachain lease
- Users supported the project's bid by loaning over 500,000 KSM, and the backers will be rewarded with KAR tokens
Karura wins first-ever parachain slot auction on Kusama
The first parachain slot auction on the Kusama blockchain platform has been completed – the first project that will have its own parachain on Kusama is Karura, a blockchain designed to be a decentralized finance hub for Kusama. The project won a 48-week lease to operate a Kusama parachain.
Parachains are customizable blockchains built using the Substrate framework. They connect to the Kusama Relay Chain and benefit from its security. Also, Kusama offers strong interoperability between all the different parachains connected to the relay chain. Polkadot also features a very similar concept, but its governance parameters are stricter than Kusama’s. It’s expected that parachains will start going live on Polkadot after the auction system and technology proves itself on Kusama.
Karura plans to offer kUSD, a stablecoin that’s collateralized with cross-chain assets. The project is also working on a decentralized exchange and a trustless staking derivative that will allow KSM stakers to retain access to liquidity even while staking their coins.
The project managed to raise over 500,000 KSM (worth about $100 million at current prices) to support its bid. On Kusama, users who want to support parachain slot auction bids from their favorite projects can loan the projects their KSM. Users can regain access to their KSM once the project’s parachain lease expires.
Most projects will likely opt to award tokens to users who are backing their parachain slot auction bids. In the case of Karura, users were rewarded with an allocation of the project’s KAR token. More than 15,000 stakeholders locked up their KSM to support Karura.
And just like that @KaruraNetwork has won the first auction and is now being onboarded as my very first parachain. More than 15,000 network stakeholders locked up KSM in favor of Karura being added to yours truly.https://t.co/iVziIzPkop
— kusama (@kusamanetwork) June 22, 2021
Karura also has a sister project called Acala, which is building similar DeFi solutions for the Polkadot blockchain platform.
There are 4 more parachain auctions scheduled at the moment – they will be running on a weekly basis between today and July 13.