What to do with your KSM from the Big Unlock
Crowdloan is an integral part of the DOTSAMA ecosystem. It is the key to their scalable multichain architecture as it allows parachains to connect to the networks by leasing a slot on the Relaychain via a permissionless auction. It is the way for new projects to get the support and funding they need to connect to the relaychain as a parachain. Crowdloan participants lend their assets to the project and the crowdloan contributions (KSM and DOT) are locked into either network for a specified period. Contributors are eligible to receive a reward (usually in the form of the project native token) if the project wins the parachain auction slot.
The locked assets are used to secure the parachain slot through proof-of-stake and are not directly available for the parachain project to use. Once the parachain slot has been secured, the staked KSM or DOT is unlocked and refunded back to the contributors after the lease period is over. In the event that the project is unable to secure a slot, the contributed asset is also refunded back to the participants immediately.
The Kusama big unlock happened on 5/15/22, 10:31:23 PM UTC based on Block Number #12700800 — with a heavy load of about 1.1 million KSM — more than 10% of the total supply was released back into circulation. The KSM were initially locked to help Karura, Khala, Shiden, MoonRiver, and Bifrost secure parachain slots on the Kusama network. Since these parachains bootstrapped the funds to pay for the lease via crowdloan, these crowdloaned funds have been returned to the lenders after the lease period expired and this unlock is the largest of any KSM crowdloan batches.
With this unlock, there are now more KSM in circulation that is waiting to be used. Interestingly, Parallel Finance has a robust KSM ecosystem via its sister network — Heiko, which features a comprehensive suite of DeFi products where users can use their unlocked KSM for a wide variety of functions to help them compound their yield and increase their capital efficiency, instead of leaving it idle in their wallets.
Here are some of the things you can do with your KSM from the big unlock:
1. Staking: Parallel offers a unique form of staking referred to as Liquid Staking. With it, users can stake their KSM and remain liquid by receiving minted derivative tokens (sKSM) that are equivalent to the staked token and can be used to redeem it at a ratio of 1:1.
Users will also receive staking rewards and a total APR of over 200% on their staked KSM by compounding their yield via lending their sKSM to the Parallel Heiko Money Market and also collateralizing it to borrow more KSM which they can also stake.
This article explains Parallel Heiko Liquid Staking product in detail. You can also check this comprehensive guide to start staking your unlocked KSM
2. Money Market: This is another Parallel Heiko’s product Money Market and Yield Farming solutions are bundled into a single user experience-focused pallet. With it, users can efficiently and effectively carry out lending and borrowing activities as well as yield farming operations with their unlocked KSM to amplify their yield. To make the experience as seamless as possible, the farming operation is automatically carried out while users are caring out lending and borrowing activities with their assets and the reward can be claimed from the interface.
This article explains how the Money Market and Yield Farm works and you can follow this guide to use the Money Market
3. Crowdloan: You can also support a project to earn a parachain slot with your unlocked KSM via our Crowdloan pallet. Crowdloan is the non-custodial decentralized lending protocol of the Heiko platform. Crowdloan participants who contributed their KSM to the protocol will earn a base reward plus project rewards for supplying their KSM.
Learn more about contributing and earning additional yield with Parallel Heiko Crowdloan here.
4. Swap: This is the Heiko platform’s AMM (automated market maker), where users can perform double actions. The first is a swap operation where they can exchange their tokens, for example, KSM to HKM while the second one is providing liquidity to the pool to earn a passive income in HKO rewards on their deposit.
Here is an article that gives more details on how Heiko Swap functions.
About Parallel Finance
Parallel Finance is a user-focused DeFi protocol that has evolved into a hub for DeFi use cases and solutions. It features a highly secure suite of DeFi super Dapps that include Staking and v2 Decentralized Crowdloan. The platform is committed to building a decentralized future that empowers the community to increase DeFi capital efficiency, security, and accessibility.
We are also one of the largest parachains in the Polkadot space with over $700M+ TVL and 200K+ active users, and we are backed by some of the most accomplished investors in venture capital and veterans of the financial services space, including Sequoia, Founders Fund, Coinbase, Polychain, etc.
Parallel Finance has a rapidly growing, close-knit team of 90+ professionals. Their backgrounds combine technology expertise with decades of experience in product management, finance, and marketing, coming from top organizations including The World Bank Group, Dash, Crypto.com, ChainLink, Meta, Polygon, Ledger, JP Morgan, Standard Chartered, Amazon, BlockFi, etc., and we’re still hiring.
Stay in touch with us.
Website: https://parallel.fi
Twitter: https://twitter.com/ParallelFi
Telegram: https://t.me/parallelfi_community
Discord: https://discord.gg/buKKx4dySW
