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Basilisk Crowdloan Kick Off

Published date: July 6 2021

Dear friends,

The highly anticipated Basilisk egg is here! You can now help the legendary reptile hatch out and make its entry in the Kusama network as a parachain.

You can support Basilisk by participating in our crowdloan campaign and pledging some amount of KSM tokens which will be locked up for the duration of the parachain slot. In return, you will be granted generous BSX rewards plus an HDX bonus to cover your opportunity costs. Once the parachain slot has expired, you will receive your KSM tokens back in full. The same applies for the unlikely scenario that Basilisk does not manage to win a parachain slot within the crowdloan campaign deadline (see hereunder).

You can participate directly by visiting our crowdloan page. You can also check out our  step-by-step crowdloan guide which will guide you through the process. Alternatively, you can participate in the Basilisk crowdloan via Kraken.

In this post you will find the general details of the Basilisk crowdloan as well as more detailed information on how the rewards mechanism works. If you are a newcomer who is interested in learning more about the project, you can visit our Documentation where you will find introductory material which will also help you understand parachains, parachain auctions and crowdloans.

Crowdloan Details

  • Parachain duration: 48 weeks

  • Target parachain slot: #4 (auctioned in the period 06th-13th ofJuly 2021)

  • Crowdloan cap: 200.000 KSM

  • Total BSX rewards: BSX (15% of total supply)

  • Maximum HDX rewards: 56.873.469 HDX

  • Crowdloan campaign deadline: 23rd of July 2021

  • Vesting period: BSX rewards and HDX bonuses are distributed linearly. The distribution will start once the Basilisk LBP event has been concluded (~2 weeks after the parachain slot is secured) and will continue until 1 week before the parachain slot expires.

Rewards Mechanism

All community supporters are rewarded for participating in the crowdloan after Basilisk has secured a parachain slot. The available rewards consist of BSX and HDX tokens which are distributed at a different rate depending on the state of the crowdloan at the time of the contribution. 

The rewards mechanism has been designed with the best interest of the Basilisk stakeholders in mind. The aim is to not overpay for the parachain slot, thereby minimizing the opportunity costs for backers and maximizing the potential future upside. Below, you will find the BSX and HDX rewards mechanisms explained.

BSX Rewards

The amount of BSX rewards which will be received by each participant can only be determined at the end of the crowdloan campaign after Basilisk has secured a parachain slot. The calculation of the rewards consists of two steps.

In the first place, all KSM contributions are weighed using a rewards multiplier. The multiplier has a float value between 1 and 0 depending on the point in time when the contribution was made. A rewards multiplier of 1,0 applies to all KSM which was pledged before the target auction #4 has started closing (July 8th at roughly 09.00 GMT). After that, the multiplier begins to linearly decrease until it has reached 0 at the closing time of the auction (July 13th at 09.00 GMT). If the total pledged KSM is not sufficient for winning a slot in auction #4, then the following auction #5 will become the new target auction. Accordingly, the multiplier for all KSM which was pledged during the previous auction #4 will be reset to 1.

After the weighted KSM contributions have been established using the procedure described above, the exact amount of individual rewards is calculated. The amount of rewards is determined in accordance with the proportion of the weighted individual contribution in relation to all weighted KSM contributions, as shown in the following formula:

rewards = (weighted_indivudial_contribution / total_weighted_contributions) * crowdloan_cap

While we cannot determine the exact amount of rewards until the parachain slot has actually been won, it is possible to calculate the minimum amount of BSX rewards for any given contribution. 

This can be done under the assumptions that the crowdloan would manage to reach its maximum cap of 200.000 KSM, and that all contributions would have the highest rewards multiplier of 1,0. This, of course, is a highly unlikely scenario but it allows us to indicate in the Crowdloan UI the minimum amount of BSX tokens that contributors can expect in return for their KSM.

HDX Bonus

To further incentivize timely support, all crowdloan backers will receive additional HDX bonus covering 5-30% of the opportunity costs of their KSM contribution. For a lockup period of ~11 months, these opportunity costs are currently estimated at 13,75% (based on a 15% APY for KSM staking).

Also here, the exact percentage of the opportunity costs which will be covered is determined by the state of the crowdloan at the moment when the KSM contribution is made. The HDX bonus multiplier will be at its maximum of 0,3 while Basilisk is lagging behind its main competitor for a parachain slot. As Basilisk takes the lead over the main competitor, the bonus multiplier will start to linearly decrease towards a minimum of 0,05. This minimum is reached once Basilisk is leading the race by 10% or more.

Taking above into account, the amount of the bonus (in KSM) for an individual contribution is calculated using the following formula:

bonus_in_KSM = contributed_KSM * opportunity_costs * bonus_multiplier

At the end, the bonus is converted to HDX using the last known historical price of $ 0.08059 for 1 HDX. 

BSX Valuation

Finally, we would like to say a few words about the valuation of the native BSX token. An accepted way to determine the total valuation of a parachain is to refer to the opportunity costs incurred by locking the pledged KSM for the duration of the parachain slot. As noted above, these opportunity costs are estimated at 13,75%. The price of the BSX token can then be calculated using the following formula:

BSX_price_in_KSM = total_opportunity_costs_in_KSM / total_BSX_rewards

To give an example of how this could look in practice, we could work with the assumption that the Basilisk crowdloan would reach its goal of 200.000 KSM. This would entail total opportunity costs of 27.500 KSM. Applying the formula above, 1 BSX would amount to 0,0000018333 KSM or roughly $ 0,000384993 (at a KSM price of $ 210).

The example above is given for illustrative purposes only. It is not possible to predict the future price of BSX with any accuracy until the crowdloan campaign has been completed successfully.

Rounding up

Thank you for your interest in supporting Basilisk! We hope that the information provided in this article has given you a more clear picture of the mechanics behind the Basilisk crowdloan. As some of it might prove difficult to digest, we encourage you to join our Discord and Telegram channels and ask any questions you may have - our community is always happy to help!

Behold Basilisk, a king of serpents who kills with a single glance. Standing in his way is dangerous so rather follow him instead:

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