Dot Pulse #22 — The EVM + Substrate Union & Picasso Deep Dive
Learn about Picasso and Composable, the new XC-20 standard, parachain auctions on Polkadot and Kusama, plus governance watcher! 📣
Welcome to Dot Pulse, your window into the Polkadot DeFi ecosystem
If you’re a humble farmer looking to learn more about Polkadot’s DeFi opportunities, or even if you’re a seasoned DOT/KSM staker, this newsletter is the place to find all the latest events in Dot land.
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We’ve made it past the first two batches and are now into the “continuous auction” territory on Kusama! The projects from here on have often gotten in for much cheaper than anyone before, but not always! Some of them had strong community traction and locked in a very decent amount of KSM, much more than they actually needed to win.
That’s the case of Picasso, the 12th project parachain and canary deployment for Composable.
Picasso, Composable’s playground
Picasso, the well-known modern artist, was famous for his ability to deconstruct any kind of figure and rebuild it in a new modular structure. That fits the project just right! Picasso is the canary network of Composable, the Polkadot parachain that aims to create the ultimate interoperability solution for cross-chain dApps.
Composable offers interoperability with a set of tools and routines to let different apps and blockchain layers communicate with each other. It’s pretty involved, so we’ll be explaining how the system works in detail.
Picasso is quite unique because it represents a great example of a canary network on Kusama. It’s an easily accessible open platform that is designed as an experimentation playground. On Picasso, both external and internal developers use their abilities and creativity to set up the most needed technologies and features, which will later be improved and used on Composable. The key part is that it’s not going to be just Composable on Kusama, but its own platform.
Still, to better understand what Picasso offers, we should take a step back and clarify what Composable does.
Composable Layers for Efficient Cross-chain Operations
The rise of dozens of innovative projects across many chains and many developer environments turned DeFi and crypto into a fragmented landscape, where operating across blockchains or benefitting from different services becomes extremely complicated and time consuming.
We have bridges, of course, but these are still all about multi-chain and not really cross-chain. You can’t interact with a Moonbeam smart contract from Ethereum, and contracts built for Solana or other non-EVM chains definitely can’t talk to Ethereum. A product that is able to connect all chains and satisfy all of these kinds of operations is very much needed, and Composable aims to do its best to create such a platform.
How would that be possible? Composable accomplishes its mission through a technical stack of layers that covers all aspects of the blockchain architecture.
The core is in Composable’s Innovation Availability Layer (IAL), a framework that is able to connect across both L1s and L2s and execute cross-chain functions without renouncing security and enabling users to seamlessly “jump” between chains, choosing the most convenient path with the Routing Layer.
The Cross-Chain Virtual Machine (XCVM), a key part of the IAL architecture, directly communicates with all the smart contracts that join the IAL, abstracting all the information into a unified format.
Finally, Mosaic is the layer dedicated to liquidity, which makes sure that liquidity is allocated where needed. It is linked to the IAL and XCVM and it is already integrated with Ehtereum, Moonriver and other L2 solutions. Its main purpose is to enable interoperability between layers to seamlessly manage liquidity.
The architecture is complex, to say the least. But that’s the beauty of creating middleware — Composable wants to simplify all of this for the end users and expose a familiar programming tool interface.
Picasso, Pallets and Layers
As with Composable, Picasso’s mission is to make things easier. The parachain focuses on leveraging already existing cross-chain communication layers to provide a complete toolkit for developers.
With Picasso, any cross-chain interaction is possible, starting with primitives (fundamental algorithms at the base of the parachain), core features like yield generation, and combined Lego sets such as yield aggregators.
Picasso uses modularized pieces called pallets to let developers mix and match what they need. These are basically blocks of code that allow inserting programmable options into the runtime, the core logic of the parachain.
Although developers are highly encouraged to create their own pallets, Picasso offers a set of pre-built pallets to expose new cross-chain features. One of them is an oracle system called Apollo, a fundamental tool for developing complex DeFi and NFT applications.
Apollo is followed by Cubic, the pallet vault created for projects focused on liquidity, such as AMMs, lending protocols, yield strategies and so on. The vault aims to create a cross-chain ecosystem where funds can be seamlessly sent from and to different blockchains including Ethereum, Cosmos, Polkadot and Kusama. Imagine an AMM where the two sides of the pairs are on different chains! That’s the kind of stuff this could enable.
And last but not least comes Angular, the pallet built for isolated lending pools (think Sushi’s Kashi), which are the most secure way for lenders and borrowers to choose the level of risk they prefer.
True to its focus of making the best out of DeFi with interoperability, Composable and Picasso have also structured an unconventional crowdloan strategy.
In addition to the basic mechanism of commiting DOT/KSM to take part in the crowldloan, Picasso and Composable users were able to directly deposit their ETH or ERC-20 tokens in a dedicated vault. The assets were leveraged with Composable’s yield strategies and the profits used to buy DOT/KSM to participate in the slot auction.
Additional profit is going to be returned to users, who also receive a receipt token (parachain Auction Tokens, or pAT) that can be used to mint Equal Cash (EQLC), a multi-chain stablecoin.
With these innovative strategies and technologies, Picasso won Kusama’s 12th parachain slot auction with a total of 115,071 KSM (about $28 million) raised from over 10,000 participants, who are going to be rewarded with the distribution of 2,000,000,000 PICA tokens, or 20% of the total supply.
The parachain is not yet launched so the tokens aren’t liquid yet, but the Composable team has certainly grown fast! It took the 6th parachain slot on Polkadot, breaking its Kusama record with more than 6M DOT, or $130 million!
Centrifuge now looks very likely to take the third slot of this new batch, cementing its lead over all of its competitors. The overall top-6 hasn’t changed since last week, with HydraDX, Interlay and Equilibrium looking to battle it out for the last few slots.
On Kusama, Integritee won the last round with 20,000 KSM committed, while Crab Network leads the current auction.
Active Crowdloans (Polkadot)
TL;DR: Offering 15% of supply to connect the 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 encouragement.
TL;DR: The DeFi protocol offers 10% of its supply in the crowdloan, but it works on a first-come first-serve basis! The team doesn’t want to pay too much for the slot, stopping rewards once squarely in the lead.
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 10% APR (40% with loyalty)
KAR/kUSD offers an APR of 51%, 57% with loyalty.
A couple of new farms popped up:
KAR/LKSM with 30%/160% 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 got pummeled, with blue chips squarely below 100% APR.
Solarbeam took a hit, but the Pool2s are offering decent APR.
RomeDAO is giving a 10% return every 5 days for OHM-style staking, but total market cap got hit.
On Moonbeam we have Solarflare, the Moonbeam deployment of Solarbeam, with a fine selection of Pool2s and low liquidity Pool1s with >100% APRs. If you’re into stables right now, there are a couple of stablecoin-only pools with APRs of around 8%.
This week we had some very major developments in Kusama with the launch of KSM on Moonriver and the XC-20 standard!
This means that Moonriver users can now teleport Kusama to Moonriver and make use of it to farm! This of course was coupled with a listing on Moonriver’s DEXs, which is a pretty major step for the ecosystem!
The most interesting thing is that it sets up for interoperability between the EVM and the DotSama ecosystem, as XC-20s can be transferred to any other parachain as Substrate-native assets. Tokens following this standard have the “xc” suffix, so KSM becomes xcKSM.
The best thing? You don’t need to change anything in the ERC-20 standard to make XC-20s. So any token on Ethereum or other EVM chains can make its way to DotSama with barely any modification! The importance of this just can’t be overstated.
The XC-20 standard is of course powered by XCM, the Polkadot cross-chain messaging format. Done once, it works with any other parachain that uses XCM, so Moonriver assets will soon be everywhere!
With some time, the same technology will be added to Moonbeam, and other parachains with EVM support will presumably add something similar. Meanwhile, new farms!
Some shiny new pairs on Solarbeam.
Celer cBridge Partners with Astar Network to Enable Asset Bridging and Inter-chain Messaging and Moonbeam.
Thanks to the partnership with Celer cBridge, Astar users will be able to bridge ETH, USDT, USDC, DAI from Ethereum and BNB, BUSD from BSC to Astar Network. Another integration with Moonbeam also opens up USDT, USDC and CELR, for bridging.
With the launch of Astar’s EVM, devs can now deploy Solidity smart contracts on Astar, making it the second functioning parachain on Polkadot!
Moonriver has implemented a one-way bridge from Statemine, which will allow users to move and use Statemine-based assets like RMRK to Moonriver. RMRK tokens can be bridged to Moonriver through the Moonriver dApp.
Parallel Finance’s team shares the main milestones since their start in 2021, such as securing funding for the project, community and team growth and winning the 4th parachain slot on Polkadot. They then introduce the roadmap for 2022, which will include the v1 Multisig Crowdloan product, v2 of Decentralized Crowdloan, v1 of a Multi-Chain Wallet and more.
KILT Protocol has launched SocialKYC, a service for managing the users’ digital identity and credentials. SocialKYC issues credentials confirming the ownership of the email address or social media accounts, after the user proves that they control the account. SocialKYC then forgets about the user and the credential, as soon as the credential is issued, thus leaving them under the user's control.
(Polkadot) Referendum 50, to upgrade Polkadot’s runtime to v9151.
(Kusama) Motion 423, to allow community collators on Statemine.
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!