Polkadot 2.0 cancels parallel chain slot auctions to improve ecological operational efficiency

According to a report by foreign media, Web3 Foundation, the organization leading the development of the Polkadot blockchain project, has a new CEO, Fabian Gompf, who stated in an interview that there will be significant changes in the future of Polkadot, including the end of parachain slot auctions related to the market.

Polkadot Ecosystem Fatigue

Polkadot blockchain was founded in 2020 and started its first parachain slot auction crowdloan in November 2021. The platform offers smaller blockchain projects the use of the relay chain's block space to maintain security and decentralization at a lower cost.

The auction uses the native token DOT, which at one point had a market capitalization of over $50 billion, ranking it seventh in the market. However, compared to the recent active performances of ecosystems on Ethereum, Solana, and even the Bitcoin chain, Polkadot appears unusually quiet.

Due to market demand and cost considerations, leading staking protocol Lido officially exited its staking services on Polkadot and Kusama in August of this year.

Recent data and news on Polkadot have been unfavorable. The number of ecosystem projects has decreased, the cost of parachain slot auctions is getting lower, the DOT token price is relatively low compared to the overall market, and there have been reports of Parity layoffs recently, all highlighting the issues Polkadot is facing - insufficient block space usage.

Changes from Polkadot 2.0

Gompf, who took office at a critical time, stated that Polkadot is about to undergo a "significant change." The operation of Polkadot will abandon the parallel chain slot auction mechanism in favor of a mechanism that determines fees based on block space usage.

This will be a crucial step for Polkadot 2.0.

Introduction to Polkadot 2.0

Polkadot 2.0 is a series of improvement plans proposed by the core developers of the community in September this year. The goal is to use the "Asynchronous backin" design to allow validators to continue operating in an asynchronous information environment, reduce block time, and provide the infrastructure for 1,000 parallel chains to run simultaneously.

Asynchronous support builds on the original heterogeneous sharding architecture of Polkadot, leveraging existing advantages to enhance performance.

Polkadot Massive Layoffs! Market Rejuvenation, Launch of 2.0, Still No Improvement in Token Price

Polkadot Parachain Slot Auction Mechanism to Become History

An important key to Polkadot 2.0 is the cancellation of the existing parachain slot auction mechanism, replaced by a pay-as-you-go model - Agile Coretime.

Why Change the Auction Mechanism?

The current parachain slot auction mechanism in Polkadot has many drawbacks that can be improved, such as:

• Inefficient and Inflexible Auction Rules. It is not possible to use Polkadot network space for less than six months, and all bidders bid in units of up to two years due to the auction mechanism, losing flexibility and the ability to dynamically adjust resources.
• Uncertainty in Future Capital Needs for Hosting Parallel Chains. There is a lot of uncertainty in the market about whether teams will have the ability to continue leasing two years after the initial deployment to Polkadot, making long-term planning difficult.
• Lack of Flexibility in Operational Management During the Lease Period. Parallel chains are not easily modified, but the Web3 industry is evolving rapidly, making them outdated.
• Unfriendly to New Projects: For projects without resources or experimental nature, there is basically no ability to choose within the cautious bidding Polkadot ecosystem.

Compared to other networks such as Ethereum, Celestia, and even Google Cloud, which charge based on the network resources used, it can be seen that bulk bidding is not the most efficient method.

Polkadot New Upgrade: Agile Coretime

The Agile Coretime upgrade will bring future Polkadot network space usage mechanisms, where any parallel chain can use the coretime block space of the Polkadot relay chain through a "pay-as-you-go" mechanism without the need for long-term leasing.

This upgrade will allow projects to freely use and allocate block space or parallel chain resources based on their needs through program logic. Developers will be able to purchase and reserve block space in bulk or choose to purchase and use immediately:

• Bulk Purchase of Block Space bulk coretime: Purchase block space at a fixed price within a fixed time frame through a broker system specializing in running parallel chains.
• Single Purchase of Block Space instantaneous coretime: Purchase and use block space immediately at spot prices.

The Agile Coretime upgrade will enable all developers to find the most suitable way of using the space for their projects, thereby reducing barriers to entry and hindrances to joining the Polkadot ecosystem.

According to the updated document content, the model for single block space purchases is expected to be priced in DOT.

Agile Coretime was first proposed by Gavin Wood in June at the Decoded conference on Polkadot. It is currently expected to go live on the Rococo test network by the end of the year, on the Kusama canary network in the first quarter of next year, and may not be officially launched on the Polkadot mainnet until the second quarter, at which point the parallel chain auction mechanism will become history.

Polkadot Block Space Trading: Coretime Trading Market

However, it is important to note that the reform of the Coretime trading market system may have an unknown impact on the existing DOT token.

Will Polkadot Have Another Active Phase?

We can expect Polkadot to have a more efficient resource allocation market in the future, which is indeed an important milestone for a blockchain designed to communicate with other projects from the start.

However, beyond the technology, whether the market will be willing to buy in remains to be seen, and we will need to continue observing the community's response and competitive landscape in the future.

After Arbitrum and Polygon successively launched tools for quickly building Layer2, they have already joined the war for the center of the ecosystem. Polkadot's competitors are no longer just Cosmos in 2021, and time is indeed running out for Polkadot.