Polkadot’s first parachain auction ends; Acala wins

The auction for Polkadot’s first parachain slot was won by the Acala project, for which more than 32.5 million DOT (~$1.33 billion) were locked up. During the event, participants collectively contributed more than 87.55 million DOT (~$3.4 billion).

Congratulations to @AcalaNetwork for winning Polkadot’s first parachain auction!

Acala will be onboarded at block #8179200 [Dec. 18] at the beginning of lease 6 with the other first 5 auction winners. Over 81K network stakeholders locked up DOT in favor!https://t.co/ZFSzezZAFX pic.twitter.com/Xn0hItfHrm

— Polkadot (@Polkadot) November 18, 2021

A parachain auction allocates a defined period during which participants can bid on projects. Despite the officially announced end time, the winner is determined after a random snapshot taken shortly before the close of the campaign.

Acala and Moonbeam were the main contenders for the victory, long in a close race, and on November 16 the latter finally pulled ahead. However, the snapshot was taken on November 15 — at the moment of the snapshot Acala had 31,436 DOT more locked up.

According to Polkadot founder Gavin Wood, such a winner-determination system helps raise competition among participating projects.

“There is real competition, and that is exactly what we want from an auction. In a traditional auction this wouldn’t happen — participants would keep bids low until the very end, and then, as late as possible, would put in all they had,” he said in an interview with CoinDesk. 

The parachain auction is split into five weekly rounds, the last of which will finish around December 16. After that, the winners will enter the slot lease period — it will run from December 17, 2021 to October 20, 2023.

Acala positions itself as the decentralized financial network and the liquidity hub of Polkadot. The project team develops various DeFi products, including the decentralized stablecoin aUSD, a non-custodial exchange and DOT-based derivatives.

In the run-up to the launch of the auctions, the cryptocurrency exchange Binance held a week-long promo, during which $30 million was distributed among participants.

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