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Parachains, an opportunity offered by the Just Mining platform
The development of investment opportunities offered by cryptocurrencies is exponential. Parachains are part of this rapid evolution of the sector.
Participating in parachain auctions means allowing your tokens to serve a purpose: financing a project. You can choose the latter from a predefined list.
Good news, the French platform Just mining, which holds the PSAN registration, now allows its users to participate in parachains auctions.
After having started lending to generate passive income in stablecoins, it is therefore a new feature for Just Mining.
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What is a parachain?
Parachain is a term which is recently appeared in the cryptocurrency sphere. Parachains come from the Polkadot ecosystem (DOT) and are part of its DNA.
As the name suggests, a parachain (or para-chain) is a parallel or secondary chain to an infrastructure blockchain, the main blockchain.
Within the Polkadot ecosystem, the infrastructure blockchains are of course Polkadot, but also Kusama (KSM). In short, Kusama is a bit like Polkadot’s “test blockchain”.
The parachain provides access to the infrastructure offered by Polkadot and Kusama. It is thus created through a dedicated space, which is called a slot.
Obtaining a slot allows you to have considerable advantages : benefit of the Polkadot infrastructure, possibility of creating your own blockchain in association with one of the most promising blockchains for the future, a guarantee of seriousness for the winning project.
This is because for a project to get a location, it must do so with authority. Places are limited and, to avoid favoritism, an auction system (auctions) has been planned.
Ultimately, it is expected that there will be 100 parachains, including 30 at most in the first year. In order to be able to participate in the parachain auction, it is essential to have DOT tokens.
What are the roles of the DOT token?
The DOT token is at the heart of the auction system and the Polkadot ecosystem in general. Without DOT, it is simply not possible to participate in the auction.
All DOT holders can participate in parachains without discrimination. On Just Mining, the undeniable advantage is that it is possible to participate with a single DOT, the value of which has been growing for several weeks.
At the start of an auction, several projects are in the running. You then have the possibility of supporting one or more projects thanks to your DOTs, which will notably allow to finance it / them and to obtain a famous slot: a parachain.
The duration of an auction is one or two weeks. At the end, if the supported project is a winner, your DOTs are blocked on-chain within a smart contract. The blocking period may vary depending on the project and can go up to two years.
On the other hand, if the supported project loses, your DOTs are returned within 24 hours in your Just Mining wallet.
The complete workings of a parachain auction on Just Mining
What are the first auctions of parachains?
Just Mining will offer three projects to bid on. It is already possible to place DOTs on the first two.
The first is Moonbeam. It is a decentralized smart-contracts platform, with the objective of interoperability between Polkadot and Ethereum (ETH), then other blockchains thereafter.
The second project is Acala, which focuses on decentralized finance (DeFi) on Polkadot. The platform can be compared to Aave or Curve in principle.
At last, Phala Network aims to implementation of confidential smart contracts and cloud services. The project focuses in particular on the protection of user data.
What rewards are planned for the winning projects?
The main interest of participating in parachain auctions is the possibility of obtaining a reward (reward). These rewards are different depending on the project and are, to date, unknown.
If we draw a parallel with crowdloans (participatory loans) on Kusama, the rewards will most likely be a airdrop of native tokens of the winning project.
The huge advantage is be able to position themselves very early on an ambitious project. Tokens received at zero value can therefore be worth very large in the future.
Of course, when entering an auction, it is not not possible to know the value of tokens once they are listed on an exchange platform. There is therefore no guarantee of obtaining financial gain.
Regarding the fees charged by Just Mining, the company keeps 5% of the native tokens issued by the winning project. For example, if the airdrop foresees 100 X tokens, you can keep 95. If the project loses, no fees will be applied by Just Mining.
In the same way, when your DOTs are released, they will be returned to you free of charge.
Participating in a parachain auction with Just Mining is therefore a excellent opportunity to be placed very early on a project. If the latter is successful, your tokens could be worth very large.
Besides, your DOTs are not given, but lent. They will be returned to you in one or more installments. It is therefore a unique opportunity for those who want to invest in a project at its beginning and this possibility is facilitated by Just Mining.
👉 If you have any other questions about parachains, see the Just Mining FAQ at the bottom of the page
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