The Kusama and Polkadot networks have a limited number of parachain slots. The network allows the parachains to acquire Kusama (KSM) for the parachain bidding via crowdloans. Recently, Crust Shadow, Shiden, Moonriver, Karura, etc., have started their crowdloan campaigns to secure a parachain slot. This mechanism will allow the users to lock their KSM tokens in the crowdloan module until the lease expires. The crowdloaned KSM tokens will be returned to the users once the lease ends.
The participating project can use the built-in Kusama crowdloan mechanism, where interested users can contribute to locking their KSM token for a lease period of 48 weeks. Each crowdloan campaign is identified by a unique index (not by address), and the funds will be managed by the crowdloan module’s logic. These module-controlled accounts are secure and are generated specifically for the campaign. It is not accessible by any project during the campaign or until the lease period ends.
To participate in a Kusama crowdloan campaign, users must have a transferable balance of KSM, i.e., it should not be locked in staking, vesting, or governance. When the user contributes KSM, a special transaction is generated that points to the parachain-specific index. Note that your contribution to a campaign will always be towards an index and not to any address (we will show this step in our guide).
The minimum crowdloan contribution is currently set to 0.1 KSM per address. Users can contribute multiple times if the campaign is open. However, they will not be able to withdraw their contribution, and the crowdloaned tokens will automatically be moved to the user’s account once the lease expires.
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Different Ways to Participate in a Kusama Crowdloan
Users can participate in a crowdloan by using any of the following three different ways:
- Project’s official website
- Wallet (Polkadot.js, Fearless Wallet, MathWallet)
- Exchange (OKEx, Kraken, and KuCoin)
In this guide, we will explain how you can participate in crowdloans using your Polkadot.js wallet.
Connect with the Polkadot.js application and change the network to Kusama.
You can change the network just by selecting Kusama from Live Relays & Parachains and then hitting the Switch button.
As soon as you change the network, you will be able to see the below page in your account section.
As you can see from the above screenshot, we have some bonded, as well as transferrable, KSM tokens in our account.
How to Unbond KSM Tokens
Users can use their bonded KSM token, but before using, you have to unbond it.
To unbond, go to the Network tab and select Staking.
Now head to the Account Action section and click on the (:) sign where you will find the Unbond Funds option.
A page will pop up where you can enter the amount of KSM token that you wish to unbond. The platform has a lock-in period of seven days, after which your funds will be released.
Transfer KSM Token
This step is optional if you are already have a Kusama token in your account. Otherwise, you can transfer the KSM token to your wallet by using your public address.
To get your wallet Kusama’s public address, users are required to change the Display Address Format For to Kusama Relay Chain in their Polkadot.js wallet.
Once you set it, your wallet address will change.
You can use this address to transfer your KSM token from another wallet address.
So now that we have some KSM tokens in our account, we can use them to participate in crowdloans.
From the Network tab, select Parachain and navigate to the Crowdloan section. You will see the list of ongoing projects’ crowdloan campaigns where you can contribute.
Important: Users are recommended to check the amount (percentage) of crowdloans raised by the project. Go with the project that is leading the race (and also research them) because if the project that you have contributed to fails to win the auction, then your funds will be returned.
To contribute, just hit the Contribute button against your desired project.
Once you click on the Contribute button, the below window will pop up where you need to fill in the amount of KSM token that wish to contribute. Afterward, confirm the process.
You can now see your contribution from the My Contribution field.
The amount that you contribute to the crowdloan will be locked for 48 weeks if the project wins the slot.
Now go to the explorer, and you can check your transaction is made towards the crowdloan module.
The crowdloan is an innovative approach by which projects can raise funds to win the parachain slot auction. The security of the funds is guaranteed by the relay chain and will be returned to the users after 48 weeks. The entire process is pretty simple and transparent, and you can easily check your contribution towards the crowdloan module with explorer. So, if you are a KSM token holder, you can give it a try to support your favorite project to win the parachain auction.
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