Key takeaways
- Acala, a decentralized finance platform, won the first Polkadot parachain auction slot with 82,218 committed contributors.
- The DeFi platform will be rolled out in mid-December with other auction winners.
- While parachains are billed to help Polkadot rival Ethereum, the network still has a long way to go to “kill” Ethereum.
Acala, a decentralized finance platform, has emerged as the winner of the first-ever Polkadot parachain auction. The network won the voting process with 81,218 on-chain contributors committing over 35 million DOT (currently worth around $1.3 billion) to the project.
The auction which went live around a week ago saw the top ten projects collect a total of around $3.5 billion in crowdloaned DOT. Acala won over Moonbeam, an Ethereum compatibility layer, due to the voting process applied. Despite Moonbeam gathering $1.37 billion, the Polkadot proprietary candle auction method chose Acala as the winner as they had spent more time in the lead role and attracted more participants.
The process is still ongoing and a total of ten projects are expected to be rolled out by mid-December.
The Polkadot blockchain has long been anticipating this day as parachains are “the last piece of core functionality to be delivered as outlined in the Polkadot whitepaper.” The feature will allow Polkadot to realize its potential for being a fully scalable multi-chain network. Polkadot was designed by Ethereum’s co-founder, Gavin Wood, with scalability and interoperability in mind from the start. The blockchain launched in 2020 and has been working towards this goal.
Polkadot parachains are such that they can be customized for any number of use cases and feed into the main blockchain, called the Relay Chain. The Relay Chain is then responsible for the network’s security, consensus, and transaction settlements. The architecture model ensures that the blockchain is secure for all the parachains and highly scalable and interoperable.
On a whole as well, Polkadot plans to be able to connect seamlessly with other blockchains through bridges.
DOT has been surging in the build-up to the launch of parachains. The Polkadot native token had set a new all-time high of just under $55 this month. It is up around 322% since 2021. However, it appears that a ‘sell the news’ sentiment is in play in the current market as the token has dropped about 4.94% in the last 24 hours and is currently trading around $39.97.
Polkadot is one of the blockchains billed to be an Ethereum killer in the long term. Its scalability is what Ethereum aimed to have achieved with its still expected sharding feature announced years ago. With Polkadot also having the backing of the Web3 Foundation to help build the decentralized web, it is in a pole position to disrupt Ethereum. But that may still be way off as the difference in market valuation shows. Ethereum has a market cap of over $480 billion, while Polkadot has a market cap of around $42 billion, less than a tenth of that of Ethereum.
