What You Need To Know About Genshiro’s Parachain Lease Offering On Kusama!
We are about to kick off a PLO (parachain lease offering) for Genshiro, our new Kusama-based DeFi parachain. Parity is expected to announce the actual dates of the auction during this week’s Polkadot Decoded event. This article will reveal more details on how you can earn up to 30% APY on your staked KSM. If you’d like to participate and get a 1% bonus in GENS tokens, then you need to join our whitelist!
We are launching Genshiro on Kusama because it shares the same experimental spirit that informs our development. “Genshiro” comes from the Japanese word for a nuclear reactor — we are inspired by stories of early scientists working to harness technology to unleash a new kind of energy in the world. Blockchain-enabled financial technology is a relatively new phenomenon that deserves fuller attention and exploration, quite like the advent of nuclear energy.
That’s why Genshiro fits so well with Kusama’s style and spirit. It will be a testing site for our future products before we deploy them on Polkadot — this means Genshiro users get to play with exciting, experimental features before anyone else. They’ll have access to a broader range of crypto assets compared to Equilibrium, less strict margin rules, the Curve AMM, a DEX with derivative contracts on ETFs, stocks, gold, and commodities, and more.
What does GENS tokenomics look like?
Genshiro’s native token is GENS, and its tokenomics are well-balanced and thought-out. For details please refer to this document. Its use cases include transaction fees, interest rates, collateral for borrowing, and liquidity for bailouts. We arrived at the following GENS token allocation with an emphasis on decentralization:
45% — initial distribution to EQ holders
20% — Kusama IPO rewards to incentivize KSM holders to vote for Genshiro to receive a parachain slot
15% — liquidity farming rewards
15% — treasury fund for recovering from black swan market events
5% — EQ staking bonus
Why does Genshiro need a parachain slot?
Mature Substrate technology and our own developments of course allow for a Genshiro launch as a stand-alone substrate. It can run sophisticated logic that includes a full-fledged lending platform and a cross-chain decentralized exchange. We recently developed an Ethereum bridge as an embedded pallet to establish a robust connection between Genshiro and the Ethereum network.
But in this case we won’t be able to reach full composability with other projects in the Kusama ecosystem, move assets across the network, or take advantage of cross-chain bridges built by other teams. These limitations may significantly impact the value that Genshiro can bring to the entire community.
By becoming a parachain, Genshiro will be connected to a vibrant universe of parachain projects on Kusama. This empowers our technology to harness all advantages of the multi-chain environment and to offer all the functionality of a DeFi one-stop-shop to a wider audience.
Genshiro needs to win an auction to become a parachain, and this requires substantial funding (up to 100,000 KSM, per our assessments). Fortunately, we have a clear plan on how to make it happen.
Genshiro’s PLO strategy
We intend to win eight six-week leasing periods for our Kusama parachain slot. We’ll do this without a KSM swap, and will only rely on a crowdloan. This is a Kusma relay-chain module that lets people contribute to the PLO by locking up their KSM until the end of the lease. Participants will be able to stake KSM to our parachain and earn rewards in GENS tokens during the parachain lease period.
20% of the 1.2 billion GENS token supply will go towards PLO auctions — that’s 240 million tokens. Users can earn up to 30% APR while participating in the PLO, but the actual premium will depend on the amount staked. The math looks like this:
Undistributed GENS tokens will go toward purchasing KSM so we can partially fund future parachain auctions ourselves. Let’s say Genshiro won a slot for six months at a current KSM rate of return of 15% and you have provided 1,000 KSM tokens. Your reward will amount to:
15% + (5% + min [0,5; 1000 / (1000 + 10000)] * 0.2) ~ 21.82% APR
The chart below shows the premium versus the stake size to further clarify the mechanics:
GENS rewards will be available for distribution after each Kusama era, which is 6 hours long. At the end of each era, we will calculate the effective KSM staking APR, then add a premium on top of that based on the amount contributed (described above). Then we will reward users in GENS tokens accounting for the volume weighted average price of GENS for the era that has just run its course.
You’ll need to register for our whitelist if you’d like to be involved in the PLO and get your hands on some GENS.
Additional opportunities for users
This PLO isn’t the only way to earn GENS. You can also join the Genshiro ambassador program for your shot at sharing the 300,000 GENS prize pool.
As a whitelist participant you will receive a referral link that’s tied to your email address. You will get a 1% referral bonus in GENS for every person who participates in the PLO on Kusama using that link.
Stay tuned on how you can earn this new token through our referral and ambassador programs — we’ll have all the relevant details on those programs shortly.