On 15th May, 2022, 1.1 million KSM (150 million USD as of today) are getting unlocked to the market. That is 9% of the total supply! In this post, we are making the case for investors to put a portion of them into the upcoming Mangata X MGX-KSM liquidity bootstrapping event.
What’s the backstory? Over a million KSM were locked up one year ago in the first round of parachain slot auctions by crowdloan investors. In return, they got airdrops in some of the most awaited blockchain projects of the year: Karura, Moonriver, Bifrost, Shiden and Khala.
Now that this first crowdloan period is ending, those tokens are going to be released to the market. The big question on everyone’s mind is:
What is going to happen?
- Will new parachain projects come up and promise big rewards for crowdloaning the tokens again?
- Will investors, disappointed with Kusama’s price performance, sell their tokens to the market?
- Will new investment opportunities and DeFi primitives pop up, ready to absorb the KSM into the market?
- Will the tokens get staked on Kusama while investors wait for other opportunities to appear?
With Kusama’s chaotic nature, we can be sure that all of those possibilities are going to happen to some extent, so the issue is more of which of these will be the driving force.
Will KSM price tank due to sell pressure or will some of the other options on the market absorb it? We asked the Twitter community and received very mixed opinions:
What will you do with your $KSM that are about to get unlocked from the first crowdloan cohort?— Alice und Bob (⚖️,⚖️) (@alice_und_bob) May 4, 2022
One thing that stood out was that a third of the ~450 respondents plan to use their KSM in DeFi.
1.1 Million Units of Rocket Fuel
Before we offer the Mangata X MGX-KSM liquidity bootstrapping event as an opportunity to become an early participant of MGX, let’s look at the big picture of Polkadot and Kusama first.
While some amount of price dipping could be expected from #TheUnlock, we think this event will act as a transfer of KSM from low conviction speculators to high conviction investors who have a more sound technological understanding of the power of the Polkadot ecosystem.
In simple terms: We and all other parachain teams are building the next generation of blockchain tech. Not just small improvements to the existing stuff, but a complete revolution!
You see, Ethereum wasn’t built in a day. It took years of time spent from convinced builders for it to become the giant that it is today. What the builders in the Polkadot and Kusama ecosystem are doing today is in some ways similar to building a rocket. It consists of several complex sub-systems that are slowly coming together to form a machine that is bigger than its parts.
Launching into Kusummer ´22
As we recently summarized in our philosophical-minded blog post titled “The battle for decentralization: First blocks, Kusummer ‘22 & third generations”, Kusummer ´22 will consist of several ingredients: XCMv3, more parachain channels opening up, bridges to other ecosystems and aUSD as THE stablecoin and financial base of the ecosystem.
Let us add one more ingredient: Parachains finally starting to deliver!
Building tech takes time and the impatient low conviction speculators have moved on to other projects to try their luck. But luck is not required when you are building on solid fundamentals with a long-term vision.
Parachains are starting to deliver and Mangata X will offer the rocket fuel… ahem, we mean… liquid markets the ecosystem needs to ignite the rocket.
Join the MGX-KSM Liquidity Bootstrapping Event
As the upcoming Kusama DEX, our mission is to provide liquidity to the ecosystem and allow capital exchange with Ethereum and other L1s. Together with the Mangata community, we are creating the strategy to grow liquidity on the DEX and connect to all parachains in the order most beneficial to the ecosystem.
We see KSM, aUSD and MGX as the 3 tokens that will be at the center of economic activity at Mangata X, providing trading routes (& arbitrage opportunities) to all other tokens of the Kusama ecosystem.
The first milestone in this series of events will be the bootstrapping of the MGX-KSM liquidity pair, which we intend to make one of the deepest liquidity pairs of the DEX to allow for efficient trading routes of all other incoming tokens. This pair needs to be as liquid as possible in order to enable high volume trading for the whole ecosystem.
We invite you to join the bootstrap with your KSM and MGX!
Becoming an MGX-KSM liquidity holder will allow you to receive LP fees, profit from algorithmic buy and burn as well as passive ownership of the Mangata X treasury, receive liquidity mining incentives and participate in Proof-of-Liquidity staking. (If you want to learn more about these, we invite you to read through our Tokenomics). Joining the bootstrap will also start to grow your rewards from time incentivized liquidity provision right after you claim your liquidity.
One of the winning submissions of our recently concluded Liquid Meme Competition
How to learn more…
If you want to learn more about the liquidity bootstrapping event, we have prepared some educational resources for you:
- The Liquidity Bootstrapping Event FAQ
- The concept in video format
- A recent Twitter thread on the User Interface
We invite you to ask any questions on our Twitter and Discord channels. We will provide the links below.
In January 2017, Ethereum’s adoption was starting to to grow and it had a market cap of 700 million USD. A year later, adoption grew exponentially during a bull market, which was also marked by a market cap that has grown to over 100 billion USD. While we cannot predict the future and know that market has gotten a lot more competitive and circumstances have changed, we believe that the fundamentals of Polkadot and Kusama are even stronger than those of Ethereum. We want to do our part to help them reach similar adoption. It would be a pleasure to have you as a part of the journey.
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