Parallel Heiko’s Parachain Crowdloan
Today I’ve staked some KSM into Parallel.
Parallel Finance is a decentralized money market protocol that offers lending, staking, and borrowing in the Polkadot ecosystem. Similar to the relationship between Polkadot and its “canary network” Kusama, Heiko Finance is the sister network to Parallel.
Parallel is the only noncustodial platform where you can stake your DOT and KSM without the risk of slashing, and stay liquid while you do. As you may already know, staking is an economic defense against the collusion of validators. In theory, the only way an incorrect transaction could be logged is if a group of validators collude to attack the network. However, attempting an attack on a system-wide level would be so costly, and the likelihood would be so low (like winning the lottery) that it would never be feasible to even attempt. On a smaller scale, bad behavior is disincentivized with slashing, and good behavior is incentivized with rewards for every block validated. When you stake your assets, you can earn ~15% APY, but you also run the risk of slashing, if you nominate a validator that performs poorly. Staking on Parallel implements an algorithmic nominating schema to predict bad behavior and prevent slashing. This enables us to insure against 100% of slashing events if you stake on Parallel. In addition, while staking on Parallel you can borrow against your stake, and lend it to the money market. This allows you to earn even more yield and stay liquid at the same time. This behavior actually increases the security of the Polkadot network, because it encourages people to stake, instead of lending.
Users who want to play a part in Parallel’s future are encouraged to participate in Heiko’s crowdloan. In return, contributors will receive a weighted distribution of up to 2.5% of HKO, Heiko’s governance token. This up to 2.5% will be split among all of the contributors in the parachain auction, and released according to a linear vesting schedule if/when Heiko wins a parachain auction.
