PolkaSmith and the Kusama Parachain Slot Auction Plan

Published in

Red Kite

6 min readMay 20, 2021

⚠️ JUNE 14 UPDATE: We have updated the new auction strategy along with PKS token metrics HERE. The crowdloan information published in the following publication is no longer valid.

TL;DR:

PolkaFoundry will launch a canary chain on Kusama called PolkaSmith.
PolkaSmith’s native token is PKS, which we migrated from PolkaFoundry’s PKF at a 1:1 ratio.
PolkaSmith will join Kusama parachain slot auction for an 8-period slot. Before that, we will call for crowdloans on Red Kite, Kusama-native crowdloan, and some top-tier exchanges.
If PolkaSmith wins the auction, the contributors to our crowdloans will receive 100 PKS for each contributed KSM, regardless of the platforms they joined.
7,000,000 PKF are reserved for rewards on the Kusama auction. The rewards contributors received for each contributed KSM will be different depending on the crowdloan platforms.

After the trials on Rococo Network, the parachain slot auction on Kusama — a “canary in the coal mine” network of Polkadot — is coming. At the same time, the PolkaFoundry developer team has devoted a lot of in-depth research and hard work to officially launch PolkaSmith, a sister chain of PolkaFoundry on Kusama.

The launch of PolkaSmith prepares for the official deployment of PolkaFoundry on the Polkadot Network. Besides, it opens a new hub for lean startups willing to take risks to hack the growth. We are excited to announce PolkaSmith and the PolkaFoundry team’s plan for the upcoming Kusama Network parachain slot auctions.

1. WHAT IS POLKASMITH?

PolkaSmith is a canary chain that acts as a parallel chain of PolkaFoundry. We will launch PolkaSmith once we win a parachain slot on Kusama Network.

Like PolkaFoundry, PolkaSmith will be a one-stop production hub for creating borderless and frictionless DeFi & NFT applications. However, PolkaFoundry is implemented on the Polkadot Network to serve enterprises and B2B applications that require high stability and dependability. Meanwhile, PolkaSmith, which is implemented on Kusama Network, is more suitable for early-stage startups that need to grow quickly and easily experiment with bold new ideas.

PKS is the native token of PolkaSmith, which we migrate as a part of PKF of PolkaFoundry. The PKS holders can swap it with PKF via a bridge at a 1:1 ratio. That means we don’t create any new tokens.

2. POLKASMITH’S PARACHAIN AUCTIONS & CROWDLOANS

According to Kusama’s official guideline, a parachain must occupy one of the existing parachain slots to be added to the Kusama Network. However, the number of these slots is limited. They are only unlocked progressively after a certain period (from a few weeks to a few months) and sold under an unpermissioned candle auction.

To know more about Kusama parachain slot auctions and crowdloans, read the docs at https://kusama.network/auctions.

For PolkaFoundry and PolkaSmith, winning a parachain slot on Kusama is very important to ensure all the products developing on PolkaFoundry can run smoothly before the official deployment on Polkadot. Therefore, PolkaSmith will join the Kusama parachain slot auctions and follow the auction guideline at https://guide.kusama.network/docs/en/mirror-learn-auction.

2.1. Crowdloans & contributors

All KSM holders will have three options to contribute their KSM tokens to support PolkaSmith winning the auction and receive rewards.

Join the PolkaSmith’s crowdloan on Kusama. We will launch this pool once the Kusama-native crowdloan mechanism starts working formally.
Bond your KSM token to the PolkaSmith pool on third-party organizations. We are working with top-tier exchanges to host the KSM crowdloans together.
Register HERE and stake your KSM on Red Kite Launchpad powered by PolkaFoundry. The Red Kite team will open the KSM pool and release its details soon.

2.2. Contributors’ rewards & incentives

We will reserve 7,000,000 PKF for rewarding our contributors. When the reward exceeds this number, the user who lends more will split the bonus fund proportionally. Depending on the channel you join to contribute KSM to PolkaSmith’s crowdloan, the rewards you receive will be different.

For contribution via Kusama crowdloan & 3rd-party exchanges

If we win a parachain slot, for each KSM contributed to PolkaSmith via Kusama crowdloan and 3rd-party exchanges, regardless of the crowdloan platforms, the contributor will receive 100 PKS.

The PKS holders then can swap to PKF at a 1:1 ratio.

For contribution via Red Kite

Bonding rewards

If PolkaSmith wins at parachain slot, for each KSM contributed to PolkaSmith on Red Kite, the contributor will receive 100 PKF and 50 ePKF.

If PolkaSmith loses, every contributor will receive 50 ePKF for each KSM they bonded on Red Kite.

ePKF is the “equivalent PKF” token on Red Kite, which means even if you don’t stake any PKF here, you can get the same tier benefits as staking PKF on Red Kite when owning a corresponding amount of ePKF.

For example, owning 500 ePKF means you have all the Dove tier rights & benefits on Red Kite without the need to stake 500 PKF.

Referral rewards

Community members of PolkaFoundry/PolkaSmith can also earn more PKF by referring friends to join the project’s crowdloan on Red Kite. For each successful referral, both the referrer and the referred person will receive an additional 0.5% PKF token as referral rewards. 0.5% referral reward is based on the number of KSM tokens that the referee has successfully bonded.

2.3. Vesting & locking schedule

For KSM

There is no KSM for rewarding. If PolkaSmith wins the auction, the contributed KSM will only be unlocked at the end of the lease period, which is about 48 weeks since the auction we win.

Otherwise, all contributed KSM in Kusama’s crowdloan ad 3rd-party exchanges will be released immediately to the contributors’ wallets. For contributed KSM on Red Kite, we will have our own policy that will be announced to the community in a separate announcement.

For PKS

Once PolkaSmith wins a parachain slot, 35% of the PKS tokens in the reward pool will go immediately to the contributors’ wallet addresses. The remaining 65% of PKS tokens will be locked during the 1st month since the auction we win then be vested over 10 months later. There is no PKS reward if we lose.

For ePKF

Every contributor who bonds their KSM to PolkaSmith’s crowdloan pool on the Red Kite launchpad will receive ePKF immediately whether we win or lose the auction.

For PKF

All information regarded to PKF rewards on Red Kite will be announced in a separating announcement. Please stay tuned to our official channels.

Note: There is still some unclear information regarding the auction of parachain slots on Kusama Network. Therefore, we may adjust the plan outlined above based on the actual situation. Join and follow PolkaFoundry’s official channels listed below this article for the latest and most accurate updates.

ABOUT POLKASMITH

Implemented on Kusama Network, PolkaSmith is a canary chain of PolkaFoundry, a one-stop production hub creating borderless and frictionless DeFi & NFT applications. PolkaSmith will be a reliable platform for early-stage startups to unleash their creativity, experiment with bold new ideas, and hack the growth. Visit PolkaSmith’s website at http://polkasmith.polkafoundry.com/ for more information.

ABOUT POLKAFOUNDRY

PolkaFoundry is a platform for building borderless and frictionless DeFi & NFT dapps on Polkadot. It aims to be the one-stop production hub for DeFi & NFT dapps with all the necessary features, services, integrations, and tools for DeFi experiments, innovations, and real-world solutions. Taking advantage of Polkadot’s interoperability and scalability and integrating many DeFi-friendly services into the platform, PolkaFoundry also provides UX-enabling features that make dapps easy to use as everyday applications and bring dapps to the masses.

Need more information about PolkaFoundry?