The Big Unlock: 1.1 Million KSM Tokens to Be Available for Use in Kusama DeFi in May

The parachain slot leasesGo to page https://moonbeam.network/education/how-parachain-slot-auctions-work/ for the first batch of Kusama parachainsGo to page https://moonbeam.network/education/what-is-a-parachain/ will end in May 2022. Since all five of these parachains used a crowdloanGo to page https://moonbeam.network/education/what-is-a-crowdloan/ to bootstrap the funds to pay for the lease, these crowdloaned funds will be returned to their owners. Why is this so important?

Well, a total of 1.1 million KSM (that’s more than 10% of the supply!) were contributed to these first parachain crowdloans for slots on Kusama. Now that the leases are ending, these KSM tokens will be unlocked for the original token holders to use. Each of these KSM holders now need to decide what to do with their tokens, and there are many more use cases to choose from than when the tokens were first locked last year. DApps on Moonriver, for example, support a variety of options including liquid staking, DeFi pools, and other use cases.

This blog serves as an overview on the currently supported use cases of KSM on Moonriver for these former crowdloan participants as they evaluate their options for using their newly-unlocked KSM. As always, please do your own research and evaluate the risks of participating in the DApps mentioned in this post.

Quick Background: Leases and Unlocks

The crowdloanGo to page https://moonbeam.network/education/what-is-a-crowdloan/ is a unique bootstrapping mechanism that helps projects in the Polkadot and Kusama ecosystems secure enough tokens to pay for a slot on the network. Token holders contribute their tokens to support the project they hope to win one of the slots being auctioned. If the project wins the slot, the tokens contributed are locked for the term of the lease. These tokens are returned to contributors at the end of the lease. By design, crowdloans rely on community engagement and endorsement in order to win a parachain slot in this competitive auction format. Those who participated in the Moonriver crowdloan provided KSM that will remain locked for the duration of the lease, which ends May 2022.

Broad Moonriver Ecosystem Support for KSM

Moonriver is the biggest ecosystem on Kusama, both in terms of TVLGo to page https://defillama.com/chain/Moonriver and overall activity/usage. New DApps and DeFi options are launched continuously, incentivizing token holders to use their KSM on Moonriver for rewards.

The Kusama crowdloan tokens are unlocking at a time when parachains are thriving: Twenty-nine parachains have been onboarded and many support KSM through XCM.

Moonriver naturally has many options for using that KSM, as the biggest ecosystem on Kusama. Called xcKSM on the network, new use cases for xcKSM have come to the ecosystem since the crowdloans. Token holders have access to a number of DApps on Moonriver that natively support KSM and xcKSM.

xcKSM Represents KSM on Moonriver

xcKSM is the XC-20Go to page https://moonbeam.network/blog/introducing-xc-20s-the-new-standard-for-cross-chain-tokens-on-dotsama/ representation of KSM on Moonriver. This allows your KSM to be used like it’s an ERC-20 across the Moonriver ecosystem while retaining its cross-chain capabilities.

xcKSM can be created by depositing KSM from the Kusama Relay Chain to Moonriver. To deposit KSMGo to page https://moonbeam.network/tutorial/cross-chain-assets-on-moonriver/ for use on Moonriver, access the apps.moonbeam.network/moonriverGo to page https://apps.moonbeam.network/moonriver and approve the prompt to connect to MetaMask. You will now see xcKSM under Cross Chain Assets. To transfer your assets from Kusama to Moonriver, click “Deposit” and connect your Polkadot.js extension within the pop-up window. Select the address from the dropdown and click “Send”!

To transfer the tokens from Moonriver back to Kusama, simply click “Withdraw”. Connect your Polkadot.js account and specify the Kusama address you would like to transfer the asset to.

XC-20s are a new type of interoperable token that conform to the ERC-20 standard but are also Substrate-native assets. All fungible assets created in this format will be able to move to other Kusama parachains, and remote parachain tokens will be able to move to Moonriver as XC-20s, like xcKSM.

The following DApps currently support xcKSM on Moonriver.

xcKSM and DEXes

SolarbeamGo to page https://solarbeam.io/ and ZenlinkGo to page https://dex.zenlink.pro/swap are both examples of decentralized exchanges on Moonriver, providing liquidity and enabling peer-to-peer transactions. They both support xcKSM. Refer to Solarbeam’sGo to page https://twitter.com/Solarbeamio and Zenlink’sGo to page https://twitter.com/ZenlinkPro Twitters for news and updates.

xcKSM and Liquid Staking

LidoGo to page https://kusama.lido.fi/ is a project on Moonriver that offers a liquid staking solution for xcKSM on Moonriver. Lido is the largest and most-utilized liquid staking protocol in the world. With roots in Ethereum staking, Lido provides liquid staking to a number of other protocols including Kusama via Moonriver. Refer to Lido’s TwitterGo to page https://twitter.com/LidoFinance for news and updates.

xcKSM and Lending/Borrowing

MoonwellGo to page https://moonwell.fi/ is an lending, borrowing protocol built on Moonbeam and Moonriver. Moonwell’s application supports xcKSM. Refer to Moonwell’s TwitterGo to page https://twitter.com/MoonwellDeFi for news and updates.

Please note that information related to claims, content, designs, algorithms, estimates and instructions in this blog post are provided for informational purposes only and nothing in this blog should constitute a solicitation for investment. Furthermore, certain information contained in this blog has been provided by third parties or otherwise reference third party products and services and is made available solely for general informational purposes and does not constitute an endorsement of any third party product or service.