Polkadot allows parachains to source tokens for their parachain bids in a decentralised crowdloan.
CONTRIBUTING TO A CROWDLOAN
If you are here for guidance on how to contribute for a crowdloan, watch the video below or read this support article on crowdloans.
TESTING ON ROCOCO
For information on how to participate in the crowdloan and parachain auction testing on Rococo, please see the Rococo content.
Anyone who has registered a parachain can create a new crowdloan campaign for a slot by depositing a specified number of tokens. A campaign is configured as a range of slots (i.e. the duration of the parachain will bid for), a cap, and a duration. The duration can last over several auctions, meaning that the team will not need to restart the campaign just because they do not secure a slot on their first attempt.
When setting the parameters of a crowdloan campaign, consider the following:
A crowdloan campaign can start well before the auction slot is opened.
The campaign creation form requires setting a crowdloan cap — the maximum amount a campaign can collect. A team can still win an auction if the cap is not reached.
Set the desired end of the crowdloan in the "Ending block" field. This helps to ensure that the crowdloan is live during the entire duration of the auction. For example, if an auction starts in three days and will last for five days, you may want to set your crowdloan to end in 10 days, or a similar timescale.
One way of calculating the ending block number is adding: (10 * 60 * 24 * 7) * (x * 6) + y
x is the number of auction periods you want the crowdloan to continue for
y is the current block number
(Blocks/Min * Min/Hour * Hour/Day * Day/Week) * (x[Period] * Week/Period) + y[BlockNumber]
"First period" field refers to the first period you want to bid for. If the current auction encompasses periods (3, 4, 5, 6), your first period can be at least 3. The last slot must also be within that range.
You can only cancel an ongoing crowdloan if no contributions have been made. Your deposit will be returned to you.
Prior to the start of the crowdloan campaign, the owner will upload the parachain data. Once the crowdloan is live, the parachain configuration will be locked and will be deployed as the parachain's runtime. Of course, once the parachain is running it can always change via runtime upgrades (as determined through its own local governance).
MINIMUM CROWDLOAN CONTRIBUTION
The minimum balance for contributions for a crowdloan campaign is currently set to 5.000 DOT. This is in an attempt to make crowdloans as accessible as possible while maintaining a balance to justify the use of the network's resources.
Each created campaign will have an index. Once a crowdloan campaign is open, anyone can participate by sending a special transaction that references the campaign's index. Tokens used to participate must be transferable — that is, not locked for any reason, including staking, vesting, and governance — because they will be moved into a module-controlled account that was generated uniquely for this campaign.
DO NOT SEND CROWDLOAN CONTRIBUTIONS DIRECTLY TO THE PARACHAIN ADDRESS
All crowdloan contributions are handled by the Crowdloan module’s logic where a campaign is identified by an index, not by address. **Never transfer tokens to an address in support of a campaign.
It is up to individual parachain teams to decide if and how they want to reward participants who forgo staking and choose to lock their tokens in support of the parachain’s campaign. As one can imagine, rewards will take many forms and may vary widely among projects.
If a crowdloan campaign is successful, that parachain will be on-boarded to the Relay Chain. The collective tokens will be locked in that parachain's account for the entire duration that it is active.
Participants will be able to reclaim their tokens in one of two ways:
If the campaign was successful, then the parachain will enter a retirement phase at the end of its lease. During this phase, participants can withdraw the tokens with which they participated.
If the campaign was unsuccessful, then this retirement phase will begin at the campaign's configured end, and participants can likewise withdraw their tokens.
crowdloan.contribute EXTRINSIC IS TRUSTLESS
Contributing to a crowdloan through Polkadot JS Apps (which uses crowdloan.contribute extrinsic) guarantees that you receive your tokens after the campaign ends. If you intend to make contributions through other websites and custodial service providers like central exchanges, review their terms and conditions thoroughly and assess the risks associated.
Note: When the lease periods won by the crowdloan have finished, or the crowdloan has ended without winning a slot, anyone can trigger the refund of crowdloan contributions back to their original owners. This can be done through the permissionless crowdloan.refund extrinsic available on Polkadot JS Apps > Developer > Extrinsics page, by specifying the parachain ID. This extrinsic may need to be issued multiple times, if the list of contributors is too long. All contributions must be returned before the crowdloan is entirely deleted from the system.
Many projects will have dashboards available that allow users to participate in their crowdloans. PolkadotJS apps also offers a breakdown of ongoing crowdloans on the Apps page.
Here is an example of the crowdloans in play during the very first Kusama auction.
Furthermore, check out this video on How to Participate in Crowdloans for steps on how to access available crowdloans on PolkadotJS apps.
