Kusama and Polkadot Auctions

Kusama and Polkadot Auctions are similar. In order for projects to be secured on Polkadot, there must be a system in place to determine which projects are worth having on the Relay Chain and those that are not. Unlike other sites where the influence of the project is based upon the capital of shareholders and individuals, Kusama and Polkadot auctions are based upon a system that keeps the playing field even. This is known as the candle auction method.

Kusama and Polkadot Auctions are similar as the two programs rely heavily upon one another.

The basic method of auctions

The basic method which is used by Kusama and Polkadot is the candle auction method. This method was created in the 16th century when ship actions took place. Basically, the auction stated that the winning bid would be determined when the candle went out. While there was a brief telling of when this would occur, the exact time and duration of the auction remained unknown until after it ended. In the same way, the Polkadot and Kusama parachain auctions work.

Parachain auctions require KSM or DOT to take part, depending upon whether you are using Polkadot or Kusama network. Because of the randomness of the ending, bidders do not have the ability to bid at the last moment. Bidding follows a five-step method for the bids.


The first part of the auction process is known as bonding. In this step, the proposed project agrees to lock in the KSM or DOT until the end of the auction. A contract for the end of the auction may be issued at this point. If the auction wins, then the KSM and DOT will need to be bonded for the duration of the lease contract. Teams can specify the duration of the lease for their project with a range of 1 to 8 lease periods. Bonds specify that the KSM and DOT cannot be used for any other activities after they are locked in. This means that you cannot use the KSM and DOT for stakes and/or transfers.

Bidding duration and costs

When the boding has been completed, the next step is to have the auction. This can be in the form of crowdloans or in parachain auctions. In both instances, the cost of the auction is based upon the KSM or DOT which is contributed to the project, update, or new feature which is proposed. The number of projects which can be bid upon at any time is determined by the council. Currently, the average projects per bidding session is 25. However, it is predicted that as the popularity of Kusama and Polkadot increases, so will the number of slots available per bidding session.

When bidding, team members can see the other bids and raise the bids accordingly. Open bidding is available for the duration of the auction. The cost of the bid is determined and set prior to any bidding. Currently, the rate is 5 DOT or .1 KSM per bid. To bid, you will need to have KSM or DOT in your wallet.

Types of bids

There are three ways in which you can bid on a job. The first is through your wallet. This is the preferred method, as well as the safest. Funds in your wallet can be added to the bid easily as you work through the Polkadot.js auctioning platform. The second method for bidding is through the official project website. This is done by clicking on the Join now button on the auction site. Be sure to read all the terms and conditions, as the rewards and the KSM or DOT stipulations may vary. Last, is exchange. This is the riskiest of investments.

Because you are transferring your KSM or DOT to a third party, you may or may not get your cryptocurrency back after the auction. Only with the exchange is the auction passed to a third party. Invest in these types of auctions only if you are confident in the trustworthiness of the project holder.

Kusama coin

Winning and KSM, DOT allocation

Duration of auctions last for a week and 18 hours on average. Again, as the end of the auction is not known but randomly determined, the ending could be any time after the one-week bidding has occurred. The winning auction is the project which has gained the most KSM or DOT support.

It should be noted that the auction is not a spending of KSM or DOT. Rather, it is an allocation of the KSM or DOT to show confidence in the project which is being proposed. At the end of the auction, if the project cannot win the bid, the KSM or DOT is awarded back to the owners, usually within a 7-day period. The auction will not clear until all members have received back their “investment” Alternatively if the auction wins, then the KSM or DOT will be locked in for the entire duration of the lease. At the end of the lease, the KSM or DOT will be released back to the owner.

Lease Contract

With the winning bid comes the lease contract. The lease contract is available in 12-week leases and can last up to 96 weeks. Leases can be renewed at the end of the contract. When won, the project becomes part of the parachain on the relaychain for Kusama or Polkadot, depending upon where the auction takes place. Most times, the project will start on a Kusama auction and get the real world environmental testing needed. Once the project has proven itself on Kusama, it typically has an auction on Polkadot to become part of the parachain there. However, this is not a requirement. Auctions can take place on either one or both, depending on the needs for the project.

Kusama and Polkadot auctions

Kusama and Polkadot auctions are low-risk ways in which you can show your support for a project. The quick bidding period of one week, the non-specified ending period which establishes a fairer bidding platform, and the return of the KSM or DOT, makes it worth taking part in.

Before participation, it is advised that you review all the policies and procedures for Polkadot or Kusuma auctions so that you understand fully how your KSM and DOT will be affected by the bids.