We currently hold 74 of the 94 available cores on Kusama and 9 of the 18 available cores on Polkadot. Our objective in sharing this perspective is to foster informed discussions about core functionality, market dynamics, and broader ecosystem implications. We emphasize that core sales operate on permissionless, free-market principles.
Documentation Gaps
Many in the Polkadot ecosystem lack a comprehensive understanding of cores—their purpose, mechanics, and economic significance. This document outlines our observations on core valuation, functionality, and potential inefficiencies. We acknowledge that some details may require refinement and we welcome community feedback.
A notable concern is the incomplete documentation surrounding cores, Polkadot’s primary resource-allocation mechanism. We urge the Web3 Foundation, the Polkadot Technical Fellowship, or other relevant bodies to prioritize clarifying and updating these materials.
Core Fundamentals
Cores serve as the foundational resource enabling rollups to access the relay chain’s compute capacity. In their current “bulk core” form, assigning a core to a paraID guarantees a rollup uninterrupted access to Polkadot’s resources for approximately one month—the core’s validity period. Purchasing a core in a given month secures compute access for the following month. While the timing does not strictly align with calendar months, this analogy simplifies the concept.
Renewal Mechanics
Once a core is assigned to a paraID with finality, the holder gains renewal rights for the subsequent month. Renewals occur during a one-week “interlude period,” where existing holders face no competition.
Following the interlude, a two-week “lead-in phase” opens, during which cores are sold via a descending-price Dutch auction. Any party with sufficient DOT or KSM may purchase available cores in a single transaction, provided they meet the capital requirements.
The final week is a “fixed-price phase,” where cores are offered at the month’s lowest price. Cores acquired during the lead-in or fixed-price phases are transferable, whereas renewed cores remain tied to their original parachain unless transferred through more complex processes.
Renewal Pricing Mechanism
The system incorporates a “rent control” feature, capping monthly renewal cost increases at 3% (the “renewal bump”). For example, a core initially purchased for 10 DOT can be renewed for no more than 10.3 DOT the following month. This mechanism provides cost predictability for projects, making rent-controlled cores a valuable resource.
Resource Allocation Concerns
While Agile Coretime theoretically allows dynamic core usage, documentation on its implementation appears insufficient, possibly leading to underutilization. Over recent months, at least 10 rollups have consistently renewed cores, with others retaining cores until their parachain lease expires. Some exhibit minimal on-chain activity, raising questions about resource efficiency.
Future Considerations
The total core supply is fixed. With elastic scaling, high-traffic rollups may require up to 12 cores each, a scenario that could intensify competition. One Technical Fellowship member noted that 12 cores could support “500ms block times and ~12MB/s DA bandwidth.” If all cores become locked via renewals, it remains unclear how renewal costs would scale. Further clarity on these dynamics is needed.
Market Dynamics
During the lead-in phase, core acquisition is often a matter of speed, with no restrictions on bulk purchases. Kusama’s initial core implementation led to oversupply and extremely low prices (as little as 0.0001 KSM), a clear mispricing given rent control.
Polkadot’s core launch avoided oversupply by capping availability at 18 cores, with ~10 typically renewed and ~8 sold monthly. Until now, no single buyer has acquired all available Polkadot cores at once; instead, purchases have been fragmented, often for testing rather than active use.
Contact Information
We welcome feedback. Feel free to contact us at coretimenegotiation@proton.me
