How To Use Stablecoins to Participate in the Picasso Crowdloan
Composable Finance is opening its crowdloan to a broader audience via the acceptance of Ethereum-based stablecoins. This article provides a walkthrough explaining how you can participate using these tokens, including USDC, USDT, and DAI. We also explain fund conversion to KSM, as well as user repayment and rewards.
We are continually trying to improve the parachain procurement model, including our crowdloan for Picasso, our own parachain. The most recent step we have taken in this mission is to allow users to participate in our crowdloan with ERC-20 stablecoins — something that has not been done before for a Kusama parachain crowdloan. These incredibly popular tokens are far more numerous than KSM, the token traditionally accepted in Kusama crowdloans. Thus, we enable participation by a much larger group of token holders, and allow them to gain exposure to the Polkadot ecosystem. Users simply deposit their stablecoins into Composable’s vault for a standard 1% fee, and we convert these tokens to KSM ourselves to put towards our parachain auction. Users will receive their funds back, in addition to PICA rewards should we win the auction.
How To Guide: Participating in the Picasso Crowdloan with ERC-20 Stablecoins
Once our ERC-20 stablecoin vault goes live, users will be able to contribute USDC, USDT, and DAI. The cap will be $15 million for the first week. Afterwards, we will raise the cap to $50 million.
Our vault will be available at 0x4adA5227e164a37a0183eC6Ce93222232f6A00F1.To participate in the vault, click on the option to contribute and you will be directed to the following page:
Here you can link the crypto wallet you would like to deposit from, type in how many/which stablecoins you would like to deposit, and input any referral codes that you have been given from others. This interface also displays your estimated PICA rewards (the native governance and utility token of our Picasso parachain) from your stakings, as well as how much of the crowdloan share of PICA rewards this would be, and the present total value locked (TVL) in the crowdloan compared to its cap.
Once you are satisfied with the parameters you have set for your staking, hit “Contribute”.
As previously available to KSM stakers, at the bottom of the page, you are also able to generate a referral code to pass along to others. You can click the “?” icon for more information about this referral code:
You are also able to see your position in the crowdloan (for each token type you have deposited) under “My Position”:
This will display your current contributions including how many/which tokens you have deposited (out of the options of KSM, USDC, USDT, and DAI), the corresponding estimated PICA rewards, and whether or not you have obtained the referral bonus. If you would like to increase your position, click on “Contribute More” to navigate back to the previous interface, where you are able to deposit more tokens.
Further, in this screen, you can click “Current Referral Bonus” to view the progress you have made towards obtaining the 20% referral bonus:
The “General Stats” page further demonstrates the statistics on your position:
Here, you can see your total value locked (TVL) of stablecoins, the projected APY on PICA rewards, and the KSM value equivalent of stablecoins you have deposited. The displayed APY for PICA assumes a $15 million diluted valuation of PICA.
From the main crowdloan page, you will also be able to view the overall auction status and statistics, and its comparison to our targeted KSM raise:
Fund Conversion, Repayment, and Rewards:
In addition to PICA rewards, a major advantage of depositing ERC-20 stablecoins into Composable’s vaults is that this provides contributors with exposure to the Polkadot ecosystem. More specifically, users’ stablecoins are used to purchase KSM, effectively giving contributors KSM exposure.
To uphold our community-first approach, we will transparently indicate whenever these purchases of KSM are executed, as well as the price ranges in which these purchases were made. This KSM will then be contributed directly to the parachain slot for Composable’s Picasso parachain.
Three Arrows Capital will be the capital provider for making these KSM purchases. This nearly decade-old hedge fund manager focuses on investments into the blockchain space, particularly in crypto and DeFi. The Composable and Three Arrows Capital teams will be on a multisig wallet on Ethereum at 0xAD44c5bb2c726Fcecf67D66Baa6cD8cC447A1637 and on Kusama at FxLmDZbMB7sZfR6MJbuUzRmrb535nKcT2CxyGwWF6LLieud.
In the event we win a parachain slot at auction, the KSM that users have contributed will be locked up in the parachain slot for 48 weeks. In the event we do not win, the contributed funds will be returned to users. Contributors will then have an option to receive these funds in KSM or stablecoins. If users opt for stablecoins to be returned, there will be an additional 1% fee. In the case of winning a parachain, the same process of returning funds will occur when the staked KSM is unlocked after 48 weeks. If a user wants their funds back in KSM, they would receive the KSM that were purchased at the strike price that the conversion was executed at. If a user wants their funds back in stables, the conversion to stables would occur at a strike price at the end of the crowdloan/auction.
In regards to the PICA rewards for stablecoin contributions, we will distribute non-transferable ERC-20 tokens to participants. These tokens must be in the users’ wallets when they go through the claim process; they will sign a transaction with the wallet that contains the PICA to then claim the PICA token directly to a Polkadot.js wallet. This is similar to the DOT token distribution that occurred for early DOT investors.
By accepting these tokens, we believe we are even better positioned to obtain a Kusama parachain than we previously were, while also providing users with a new opportunity for exposure to Polkadot and Kusama. We are thus bidding on these Kusama parachain slots, which we began on September 1st and will continue throughout the subsequent 4 auctions.
We will keep our community updated on our endeavors for parachain procurement, and greatly appreciate your active involvement in the process.
For more information about Composable and how it is architecting the unified DeFi landscape of the future, check out our socials: