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Dot Pulse #19 — Polkadot’s 2021
We review Polkadot’s achievements in 2021 and what the next year will bring, plus the usual Polkadot parachain auctions, highlight and governance watcher! 📣
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We interrupt our regular series of parachain deep dives to celebrate the passing of this amazing 2021 for Polkadot!
It goes without saying that it’s been a good year for everyone. We had a powerful bull market in the earlier part of the year, and then lots of time for buidling! Jokes aside, the latter part of the year was definitely not the standard definition of a bear market. Supercycle, anyone?
A steadily growing adoption cycle is where Polkadot is set up to shine with its large and very varied ecosystem. As you’ve hopefully seen with some of the parachains we covered, it all goes beyond the basic EVM chain to set up farms!
But let’s go back to January 2021. The Polkadot network was launched with transfers fully enabled by that point, but we were still waiting for the main value driver of this new network: parachains.
This year was all about the parachains: setting them up, testing them, auctioning them off and deploying them.
The first stage, the testnet, had already begun in August 2020. We saw a key update in late December, effective in January 2021, where Rococo V1 was deployed. This was the one that let developers use the testnet to connect their own parachain, which was pretty critical.
Fast forward through six months of testing and in June we saw the first parachain being officially launched on Kusama: Statemine. This was the first common good parachain that performs a function that is important to the entire community (in this case, token transfers). Parachain auctions for Kusama started immediately after in mid June, while Polkadot got started in November.
The road to get here was rocky at times. For example we had a small hack to a parachain and a few chain halts in the early days as the teams were still ironing out all the kinks. Plus, not all parachains managed to complete their launches on Kusama, so hopefully 2022 will be the year it all comes online!
More than anything else, 2022 is the year of Polkadot parachains. Though the first 5 are already live, it’s still going to take a month or so for them to be functional. Then in March we’ll see the next batch going technically live. Then it’s just about refining cross-shard communication (XCMP) and the Polkadot network can be considered fully launched!
A few metrics to behold
Sometimes a picture’s worth a thousand words, won’t you say?
Let’s look at a few figures to track DotSama growth this year. We’ll start with the obvious…
DOT started the year at $9.2 and quickly topped at $47 and $54 in the second part of the year. This year has been all about the layer 1 narratives, and DOT was very much in the lead for much of the year.
Of course, some competitors later took mindshare away by opening gigantic floodgates of incentives. Meanwhile, Polkadot hasn’t even properly launched! All the building and set up this year are shaping it up perfectly to become the L1 play for 2022.
The Kusama crowdloans ended up locking up a whopping 31% of total supply! Another 41.7% is currently staked, so in total only 28% of all KSM is currently circulating.
So Kusama parachains have attracted a fair amount of attention and brought devoted community members to each of the projects.
And that resulted in pretty amazing growth for Moonriver, which shows numbers comparable to a few other alt L1s. And consider that there are at least 20 of these here!
But let’s face it, KSM is worth less than 10% of DOT. As much as its community is strong, the market is clearly favoring Polkadot.
We’ve seen nothing yet.
Looking ahead for 2022
What kinds of predictions can we make about next year?
Polkadot parachains will launch. They’ll work, because we already know from Kusama that they do!
By the end of the year we’ll probably get a couple dozen parachains up and running. Likely with some form of XCMP already set up to transfer assets between them.
And then, who knows! But the Polkadot ecosystem is already alive and vibrant with original development, even going beyond the holy trinity of DeFi, NFTs and GameFi. We’re seeing identity, data storage, real world assets and many exciting primitives quietly flocking to Polkadot.
It’s certainly the ecosystem to watch for 2022!
Happy New Year from the DeFi Pulse team!
The second Polkadot parachain batch is proceeding as planned! Efinity took the first slot with 7.6M DOT committed, which is lower than any of the other five! That makes sense, since the second batch only goes live in March.
The top-5 is looking fairly stacked with Composable most likely to take this second slot.
On Kusama, Crust and Sakura won the last two slots, while Robonomics is leading this batch.
Active Crowdloans (Polkadot)
TL;DR: Starting out fast with a 12% supply offering. The platform aims to be an “everything VM” to hold every possible smart contract architecture on one chain. The nice thing is that you can also contribute with stablecoins to this one!
TL;DR: Offering 15% of supply to connect Centrifuge Chain to Polkadot. Offers a whole bunch of early bird, referral and double dip bonuses!
TL;DR: The platform offers 10% of supply to bring trustless Bitcoin to Polkadot. Plenty of referral bonuses, double dips and early bird bonuses too!
TL;DR: This DeFi-focused parachain offers 20% of the supply in a variety of base and early bird and referral bonuses. Plus it gives you an xDOT derivative to make use of your assets!
Earn KAR by staking on Karura DEX
Yields are around 16% APR (or 23% with loyalty bonus) for KAR/KSM.
KSM/LKSM farm has 15% APR (45% with loyalty)
KAR/kUSD offers an APR of 51%, 57% with loyalty.
A couple of new farms popped up:
KAR/LKSM with 45%/230% APR
kUSD/LKSM with 30%/150% APR
Earn KAR + BNC (Bifrost tokens) when staking kUSD/BNC
APR is 120% with loyalty, 35% without.
Sushi farms on Moonriver staying below 100% APR.
Solarbeam farms offer plenty of choices with more than 100% APR and decent rates for blue chip tokens.
RomeDAO is giving a solid 10% return every 5 days for OHM-style staking.
Astar Network published a very interesting rundown of the lessons they learned with Shiden, their canary deployment.
This is the stuff you learn the hard way when you go through with a launch and is yet another reason why Kusama is so useful! Testnets with no value only get you so far. Here the team experienced realistic conditions that set them up nicely for the Astar launch!
One of them was the sheer volume. The team didn’t expect to receive quite as much volume as they did, so the launch strategy wasn’t optimal for the blockchain’s state at the time. The team didn’t quite explain it in detail, but the timing of transfers here was crucial.
An important aspect is also the EVM module. The features available at launch are often key to creating the initial impression of a project. The team didn’t have the EVM enabled at launch, which likely wasted some of the initial momentum. For Astar, they aim to enable the Frontier pallet with the EVM as soon as they launch. As we mentioned in the Shiden deep dive, the Astar EVM also allows using Solidity dev tools like Truffle and Hardhat, so the race for the EVM platform will be heated!
Finally, a bit of centralization turns out to be helpful! Adding crowdloan participants into a database helps retrieving the list for later, when the rewards need to be delivered. Otherwise the team is stuck with running expensive and slow node queries! This will surely get better as more indexing tools reach maturity.
So if you’re just an honest farmer you can rest assured that the Polkadot teams have learned most lessons to be had with Kusama. After plowing through chain halts and launch complexities, Polkadot should be a breeze! Let’s see who will be the first parachain of the new batch to fully launch.
The HydraDX team explains how their Omnipool with HDX as the connector pair will avoid creating too many fluctuations, using LHDX to supply liquidity mining rewards.
Moonbeam is speeding through the launch phases, now adding collators and decentralizing the network. Next step is the EVM!
Taiga Protocol aims to build a StableSwap exchange and synthetic in what may be the first project committing to build on Karura!
(Polkadot) Referendum 48 to fix Statemint, which was launched with the wrong cryptographic scheme initially.
(Kusama) Referendum 162, to unbrick Composable’s Picasso. The parachain stopped producing blocks after a bug in the configuration when porting to Kusama.
(Polkadot) Treasury Proposal 79, submitted by Messari to contribute for reports on Polkadot
All info in this newsletter is purely educational and should only be used to inform your own research. We're not offering investment advice, endorsement of any project or approach, or promise of any outcome. This is prepared using public information and couldn't possibly account for anyone's specific goals or financial situation. Be careful and keep up the honest work!