The winners of Kusama parachain auctions 16-20: SubSocial, Zeitgeist, Sakura, Crust Shadow, and Robonomics

The latest batch of Kusama auction winners features some really fascinating projects, including a prediction market, a decentralized social network, and even ‘the robot economy’. Who knows – perhaps one of them will outperform the market in 2022? Learn everything about SubSocial, Sakura, and others  in our in-depth guide!

Why you should track the winners of Kusama auctions

The leaderboard of Kusama’s parachain auctions reads like a ‘Who’s who in blockchain – the 2023 edition’. They offer solutions in areas like multichain finance, sovereign identity, decentralized derivatives, synthetic assets, NFT collateralization etc.

All this may seem really complex, but these narratives could become very popular very soon as Web 3.0 and DeFi 2.0 take shape. Many even believe that Web 3.0 will be the tech trend of 2022.  The projects that compete in Kusama and Polkadot auctions today could have a first-mover advantage in this field tomorrow, so it’s worth tracking the results of each round.

We’ve already written about many of these cutting-edge platforms in our previous articles, for example:

We’ve covered these and many other fascinating projects (including Basilisk, Kintsugi, Karura, Bit.Country, Quartz, and Genshiro) in our previous articles:

Kusama auctions 1-5

Kusama auctions 6-11

Kusama auction no.12

The first Polkadot auction

This time we’ll focus on the winners of the auctions from 16 to 20: SubSocial, Zeitgeist, CrustShadow, Sakura, and Robonomics. But first let us remind you how parachain auctions work.

Parachain auctions on Kusama and Polkadot: a primer

Kusama and Polkadot are multichain networks consisting of many independent blockchains (called parachains) that can exchange assets and data. For example, Karura and Moonriver are both Kusama parachains, and each of them can host a multitude of dApps, each with its own token. In theory, users will be able to send tokens from Moonriver to Karura and back without using cumbersome bridges: the central Relay Chain acts as a bridge.

Both Polkadot and Kusama have 100 parachain slots each for now, though the number may increase in the future. To lease a slot, a project needs to win an auction. As winning requires locking up millions of dollars in KSM or DOT, projects appeal to their supporters in special fundraising campaigns called crowdloans.

If a project wins, all the funds supplied by the crowdloan participants are locked for the duration of the parachain lease (up to 2 years). In return, the project rewards the supporters with its own tokens.  Usually between 3% and 30% of the total emission is allocated for this purpose, so you can consider crowdloans as an interesting long-term investment.  If a project doesn’t win, the supplied KSM or DOT will be refunded.

Between July 2021 and January 2022, there have already been 22 successful auctions, so the model is clearly working. You can read more about the mechanics of blockchain auctions in this post.

SubSocial (SUB)

SubSocial is a decentralized social network – or, rather, it allows users to create their own social networks and communities and decide how they should be moderated and monetized.

The huge power that platforms like Facebook and Twitter have over our data has become a controversial issue. They share data with advertisers so that you are shown personalized ads; and hidden algorithms determine what sort of news and viewpoints you see at the top of the feed. Even Facebook’s photo analysis tool has caused trouble: sometimes people get banned for posting innocent pictures of their own kids.

SubSocial aims to give the power back to the users. You’ll be able to set rules for your social space, assign user roles and permissions (similar to Discord), set up donations and crypto payments, and mint posts as NFTs. You can even issue social tokens – something that can become very trendy this season.

All the communities created in SubSocial will be resistant to outside censorship, though you as the owner can decide how to moderate content – and even create a DAO of many owners. It’s also worth noting that the project uses IPFS (InterPlanetary File System) to store content.

The testnet is already live, and you can explore hundreds of spaces. Most of them have zero or just a few posts, but some have over a hundred – for example, PolkaWarriors, RMRK, and BiFrost Finance.

Zeitgeist (ZTG)

Zeitgeist is a platform for creating and betting on prediction markets. A prediction market is a protocol that allows users to bet on the outcome of an event: a soccer match, presidential elections, future oil prices, etc.

For example, you could buy a contract that reflects one of the possible outcomes of a game: ‘Real Madrid wins’ or ‘Chelsea wins’. If your chosen team does win, you’ll earn a profit; if it loses, you may or may not suffer a loss (so-called punitive and non-punitive prediction markets).

The best-known dApp of this type is Augur, which runs on Ethereum. However, as you probably know, Ethereum gas fees are still very high (around $30), so using Augur can be impractical for small betters. We don’t know how low Zeitgeist’s fees will be yet, but in general Kusama parachains charge very low commissions, so Zeitgeist will have an advantage on Augur.

Apart from sports and politics, Zeitgeist allows users to bet on crypto prices, eSports and even on the success or failure of a startup. Moreover, you’ll be able to hedge your risks by using prediction markets as an insurance. For example, if you’ve bought Bitcoin and hope that the price will rise, you can buy a prediction contract that will pay out if the price drops.

Perhaps the most interesting feature of Zeitgeist is futarchy – a form of governance that uses aggregated information from prediction markets to make better decisions (together with traditional on-chain DAO voting).

Zeitgeist even has a court system to resolve disputes – which can arise, since DeFi prediction markets rely on oracles to report the outcome of events outside of blockchain, and sometimes users may dispute an oracle’s report.

Sakura (SKU)

Sakura is a cross-chain DeFi platform that supports Ethereum, Solana, BSC, Polygon, Avalanche, Fantom, Near, and various Kusama and Polkadot parachains, starting from Clover. It’s the sister project of Clover Finance, which won Polkadot auction no.5 in early December 2021.

Users will enjoy gasless transactions, meaning that they will be able to pay transaction fees in whatever token they happen to have in the wallet instead of SKU. If you’ve ever found yourself unable to send a transaction on Avalanche, Ethereum, or BSC simply because you had run out of AVAX, ETH, or BNB, respectively, then you know the pain is real.

Sakura is also planning to introduce dynamic fees: the more you use the wallet, the less you’ll pay for transactions. Another interesting innovation is that part of the fees will be distributed among the developers who build on the platform.

With Sakura, it will become much easier to create cross-chain decentralized exchanges, lending protocols, yield farming dApps, and more. The parachain comes with native bridges for Ethereum and BSC.

Sakura is a real veteran of Kusama auctions. It participated in the first batch and finished 12th, raising less than $900k, so had to refund all the crowdloan participants. In the second batch, Sakura came 13th with $860k – and once again, a refund. In the third batch, it finished 6th with $2.9 million – much better, but another refund. Auction no.18 was the lucky one: Sakura won with $3.1 million.

There are two conclusions we can draw from this remarkable story:

1) Never give up: Sakura won after losing 17 times! The community clearly stayed very loyal to the project, bonding KSM for the crowdloan again and again.

2) The win threshold has dropped dramatically since the first auction. Karura’s crowdloan attracted 500k KSM back in June, and Moonriver won with 206k KSM. But for Sakura, 17.4k KSM turned out to be enough.

This could mean that the hype around the auctions has calmed down, but it’s not a bad thing. Solid projects without the backing of whale investors now have a real chance to win a parachain slot.

Crust Shadow (CSM)

Crust Shadow is a decentralized storage platform. The problem of file storage is becoming more urgent in the crypto space as NFTs and the metaverse are gaining ground, because you can’t store any large files on the blockchain: it’s too expensive. So where do you put all those images, videos, 3D objects, VR avatars, and other assets that fill the metaverse space, Play2Earn games, etc.?

Right now, there are two main options: traditional servers and IPFS (InterPlanetary File System). Cloud servers like AWS (Amazon Web Services) are cheap but centralized: whoever controls the server ultimately controls all the data it holds.

For example, if you buy an NFT that points to an image of a penguin, and that image file is deleted from the server, the NFT will point to a blank error page – and will become worthless as a result.

If the metaverse and Web 3.0 are to become reality, we need robust decentralized storage systems. IPFS is great, because it’s content-based, not address-based: the same file is stored in many hashed copies by different users, and you find it by its hash, not by an address link. As long as there is a copy somewhere, the file will be served when you ask for it.

There are two problems with IPFS, though: 1) it can be technically daunting for beginners; 2) users aren’t incentivized to stay online and serve files: IPFS is free to use.

Here’s where Crust Shadow comes in: it provides a user-friendly storage market where you can upload files and request for them to be stored. It also offers secure permanent storage for valuable assets like NFTs and allows for storing large sets of data, such as websites and whole dApps – both in IPFS and other emerging storage protocols.

Just as importantly, Crust Shadow provides incentives for storage space owners through fees, staking rewards, and a ranking system. Nodes are motivated to serve files quickly to be ranked higher and get more orders.

Crust Network and Crust Shadow position themselves as ‘Web 3.0 storage for the metaverse’. Interestingly, our own project, Pontem Network, is building financial infrastructure for the metaverse, so you could say that we and Crust are tackling the same grand challenge, but from different angles.

Pontem is an experimentation platform for Diem, an upcoming blockchain previously backed by Meta (formerly Facebook). Meta is investing millions into the metaverse space, and one could speculate that Diem will eventually be integrated into this huge project. However, Diem will be strictly regulated and will have a high entry barrier. That’s why we decided to give developers a chance to test dApps for Diem in a live environment before Diem itself becomes available.

With Pontem Network, teams can build communities and access liquidity across the Kusama and Polkadot networks. In fact, we were the first to bring MoveVM (Diem’s virtual machine) to Substrate. Pontem is now preparing to take part in an upcoming Kusama auction: read about it here and find out how to support us and earn at least 67.5 NOX.

Robonomics (XRT)

Robonomics provides a complete set of tools for creating IoT (Internet of Things) apps. IoT is the emerging network of electronic devices that have sensors and/or means of communicating with each other. For example, an IoT-enabled camera above your door could connect to your smartphone and show who’s ringing the bell. Another example: a fuel sensor in a car could tell the gas station pump exactly how much gas the car needs – then connect to special software to calculate how to reduce gas consumption.

The IoT economy will feature a multitude of microtransactions between devices – and Robonomic offers a very efficient way for executing such atomic transactions. It also has tools for connecting devices, dApps, and IoT services; software for creating IoT apps; and solutions for storing IoT data in IPFS.

You can already use the Robonomics test dApp: add a device or your computer and see if you can configure it and make it perform unexpected tricks! The ultimate vision of the project is to create ‘the robot economy’, where billions of autonomous devices work together.

What’s next for Kusama and Polkadot auctions?

The second round of Polkadot auctions is in full swing, and we can’t wait to tell you about the winners, which include Efinity and Composable Finance, the ‘big sister’ of Picasso. Meanwhile, auctions no. 21-25 on Kusama have already produced very interesting winners, such as Crab Network and Integritee Network.

Follow Pontem Network on Twitter and Telegram and be the first to read our next auction analysis – and of course, get fresh updates about our own bid for a parachain slot on Kusama!