2 years ago
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Parallel Finance has secured the fourth slot in the Polkadot parachain auctions, which contributed a total of 10.75 million tokens – $306 million worth of Polkadot (DOT) – from more than 30,000 users.
The San Francisco-based institutional-grade lending protocol for decentralized finance (DeFi) managed to maintain and hold the lead from Clover Finance, Litentry, and others throughout the entire process in a major milestone for the firm.
Parallel will go live on Dec. 17 for the next 96 weeks
Parallel’s was the 3rd largest total amount of polkadot contribution for all auctions to date, according to the statement.
Investors cast votes by staking their DOT tokens on Polkadot parachain auctions. Parallel Finance has secured the most number of votes, thus winning the fourth auction.
Yubo Ruan, founder of Parallel Finance, said: “The Parallel Finance team thanks the community members for showing trust, thereby helping us to become part of the Polkadot ecosystem by securing a parachain. It’s been a huge milestone in a very short period of time. Since its inception in April 2021, Parallel Finance is gaining ground as the most trusted institutional grade lending protocol for decentralized finance.”
As the opening batch of the five Polkadot auctions concludes in a few days, Parallel will go live on December 17, along with other winning parachains, for the next 96 weeks.
During the parachain lease, Parallel holds the funds until the end of the allotted time with the lock-up rewards being distributed in 9 sessions, the first of which begins five days after parachains are deployed. Rewards are sent to contributors every 92 days.
Parallel Finance is backed by Sequoia, Founders Fund, Polychain, Lightspeed Venture Partners, Slow Ventures, Blockchain Capital and Alameda Research.
The protocol offers lending solutions tailored to Polkadot, including interest rate swaps for long-term growth to DeFi, leverage staking, and auction lending.
Parachains are not ICOs
Polkadot can be thought of as a fully decentralized platform that is designed to allow diverse blockchains to transfer messages — which includes assets of monetary value — in a manner that is totally trust-free and secure. From a design standpoint, Polkadot has been made to be totally open source and even allows for additional blockchains to be built atop it (referred to as parachains).
As a result of employing such a unique operational structure, it is possible for users to execute atomic inter-chain transactions amongst themselves within the Polkadot ecosystem. All of this achieved in a way wherein there is no need for third-party intermediaries, thus allowing for the creation of a holistic internet of blockchains.
One of the key selling points of the Polkadot system is that it makes use of an auction system to sell its parachain slots. In other words, all of the substrate-based independent blockchains that are connected to the core Polka ecosystem can be vied for by third-party firms for a fixed length of time (on a contractual basis).
To further elaborate on the matter, it should be pointed out that parachain auctions differ quite significantly from initial coin offerings (ICOs) that have traditionally been used by crypto projects to raise funds. This is because these auctions do not force investors to transfer ownership of their DOT to the bidding team or any other third party. Vying bids are returned to their rightful owners if the project loses an auction and even when a project succeeds and wins, the associated funds are returned once the parachain slot expires.
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