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Over $130 million—yes, you read that right—has been loaned to a crypto auction run by Kusama, a hot new DeFi project.
Nearly 1000 different addresses from San Francisco-based exchange Kraken contributed KSM, the native token of Karura, in support of Acala, a DeFi hub. Over 9,300 different addresses directly contributed to support Acala. And people are eager to support this project, too: $100 million-worth of crypto was raised in just 30 hours.
The auction—still ongoing—is a market-efficient way of selecting which parachains will be added to the Kusama Relay-chain.
Sounds confusing? Let’s break it down.
Parachains are different blockchains that connect with Polkadot and run in parallel within one unified network. Polkadot is a rival to Ethereum, and the ninth biggest cryptocurrency by market cap. It was also created by Ethereum co-founder, Gavin Wood.
The project hopes to compete with Ethereum (the second biggest crypto by market cap) by connecting different specialized blockchains into a single unified network—something Ethereum can’t do.
Polkadot seemingly sprung out of nowhere to become one of the biggest cryptocurrencies by market cap.
This is because it is working to improve the DeFi ecosystem. DeFi is a system of decentralized financial products that are trying to replace banks. Such products—which have exploded in popularity over the past year—need to run as quickly, cheaply and smoothly as possible. Polkadot and its parachain network says it can help achieve this.
Parachain auctions, supported by crypto exchange Kraken, allow investors to back projects to compete for slots on Kusama’s Relay Chain—Kusama’s main blockchain where transactions are finalized.
Acala is the DeFi hub of Polkadot. It brands itself as an “all-in-one DeFi platform” that allows users to stake, swap, borrow, lend, earn crypto cheaply and quickly. It runs on Polkadot and is Ethereum compatible.
Speaking of the $100 million raised, Ruitao Su, Co-Founder and CEO of Karura and Acala, said: “It has been an unforgettable experience creating a more accessible and open financial system.
“This level of support for our launch of Karura on Kusama, and later Acala on Polkadot, is proof of the positive demand for interoperable, decentralized financial products. We are grateful for such incredible support, and are excited to introduce our DeFi products to the world.”
Bette Chen, Co-Founder and COO of Karura and Acala, added: “It’s so exciting to see the community embrace this new, ethical, effective model for bootstrapping blockchain projects. We are making history together.”
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