Parachain slot auction Disclosure Statement
Parachain auctions are risky and not suitable for everyone. Before participating in a parachain auction through Kraken, it is important to understand the unique risks involved. These risks include:
- •When you contribute to a parachain auction, the DOT or KSM you use to support an auction candidate is locked (or “bonded”) on the Polkadot or Kusama network.You will not be able to trade that DOT or KSM (even if the price is rising or falling dramatically), stake it or use it to support other parachain auction candidates. The amount of time such DOT or KSM is bonded by the network varies depending on whether the parachain auction candidate you support wins or loses the auction and how long of a time period they are bidding to acquire the parachain slot for.
- •The Polkadot and Kusama networks and parachain auction process is new and relatively untested.While we will provide certain information about Polkadot, Kusama and the parachain auction process, we have gathered this information from third parties for your convenience, but without any obligation to vet or verify it. Further, it may not take all possibilities into account. For these reasons, the information we provide you should be viewed only as a convenience, rather than a reliable source of how the process will work and how parachains will function on the network. In reality, Polkadot or Kusama may have bugs, hacks, failures or undergo changes that materially impact the functionality of parachain auctions and those that participate in the process. For example, the DOT or KSM you bond to support a parachain auction candidate is intended to be unlocked and retrievable at a later point in time; however, a hack or bug in the code may make such retrieval commercially impracticable or even impossible, in which case you could sustain a total loss of your funds with limited or no legal recourse.
- •The parachain auction candidate that you support may fail to deliver a parachain network or reward tokens that align with your expectations.There is no guarantee that a parachain auction candidate will deliver any particular network functionalities or reward tokens following an auction. In the event the candidate fails to live up to your expectations, you may have limited or no legal recourse.
- •Reward tokens are distributed by us on a pro rata basis. When you participate in a parachain auction through Kraken, any reward tokens we receive on your behalf will be credited to you on a pro rata basis as described here. Accordingly, if a parachain auction candidate distributes reward tokens by reference to additional criteria (e.g., earlier supporters at auction receive more tokens), you may receive less tokens through Kraken than you would by participating in the parachain auction directly.
- •The risks described above are only some of the risks relating to your participation in parachain auctions.Under the Terms of Service, you represent to us that you will understand and accept these and all other risks prior to using our services to participate.
There is a lot to learn about parachain auctions generally and the specifics of supporting any particular parachain auction candidate. This is your money at stake, so it's worth your time to walk through everything carefully.