Dear Community,
The Litentry parachain slot for the current lease period #15 will expire in 22 days (9th April 2024) and your locked DOTs will be returned to you upon the expiration. However, to prevent parachain removal, a process characterized by the reassignment of the parachain lease slot and subsequent removal of the expiring parachain from the Polkadot network, we have already started the parachain auction bid for slot #65. Parachain removal involves detaching the parachain state and stopping validation and block production activities associated with it but with the ongoing slot #65 auction bid, the transition process will be seamless.
Once successful, the lease will grant us another 96-week leasing period. There will be no crowdloan for this auction as the cost will be covered by the Litentry Foundation.
Thank you for your continuous support!
To learn more about parachain auction, continue reading:
What is a Parachain Auction
A parachain auction serves as the gateway for parachains (substrate-based independent blockchains) to link with the Polkadot or Kusama Relaychains through an open, permissionless bidding process. The primary aim of these auctions is to assign parachain slots to projects seeking to operate within either network, with the ultimate goal of accommodating up to 100 parachains simultaneously.
These parachain slots are deliberately limited to foster competition and ensure the optimal allocation of fixed Relaychain resources. With a restricted number of slots available, aspiring parachains must vie against each other to secure a lease, both initially and upon renewal after the lease period elapses. For instance, on Kusama, lease durations max out at 48 weeks, whereas Polkadot allows for a maximum 96-week lease.
This competitiveness and scarcity mechanism effectively filter out the most viable parachains for each slot — only those demonstrating success, active usage, and a sustainable tokenomic model can maintain their slot, while dormant or unsuccessful parachains cede their lease to more promising contenders.
Auction System
The Polkadot network employs a candle auction system to allocate its limited parachain slots. In this system, parachains submit bids, and the highest bid at the auction’s conclusion wins the slot. However, the auction’s duration is predetermined and undisclosed to the public, preventing participants from strategically sniping the auction in its final moments. Although the precise closing time remains unknown, the auction typically spans approximately one week.
Snipping is a situation where a high bidder swoops in during the auction’s final seconds to secure victory, leaving other bidders no chance to counterbid. By employing the candle auction system, Polkadot ensures a fair bidding environment.
There are two methods of bidding:
A single account bid that doesn’t require a community and a crowdloan.
In a single account bid, an individual entity (in this case, the Litentry Foundation) makes the bid for a particular auction. To make a single bid, an entity can bid directly, but the amount bid will be bonded until the auction ends. This method is usually used by projects that have gained enough tokens to bid for themselves — with or without external funding.
For crowdloan, community members contribute and raise DOT to bid in an auction. If the project wins the parachain slot, the contributed tokens will be locked up for the length of the lease. In return, contributors usually receive the native token of the project as a reward. Upon expiration of the lease period, all the locked DOT will be returned to the wallet of the contributors. The balances of unsuccessful bids are unlocked as the auction ends and returned accordingly.
