Parachain Slot Auctions
Parachains connect to Polkadot by leasing a slot on the Relay Chain for up to 96 weeks at a time, with the option to renew. Parachain slots are assigned by an on-chain auction, with auction winners locking up a bond in DOT for the duration of the lease. Auctions and crowdloans raise the bar for blockchain projects, incentivizing them to demonstrate their technology and gain community support prior to launch.
How Auctions Work
To bid in an auction, parachain teams agree to lock up (or bond) a portion of DOT tokens for the duration of the lease. While bonded for a lease, the DOT cannot be used for other activities like staking or transfers.
After the lease, the full amount of DOT is unlocked, meaning auctions do not require teams to “spend” DOT. The cost of the lease is best characterized as the opportunity cost of not being able to use the bonded DOT for other activities.
Some parachain teams will fund their auction bid with the help of a crowdloan campaign, which allows them to accept contributions from DOT holders. Crowdloan contributors get their DOT back at the end of the lease, and parachain teams can choose to reward them in various ways, including with a distribution of the parachain’s native token.
Auctions on Polkadot have an open bidding period of approximately 1 week. At the end of the bidding period, the precise moment of the auction’s close is determined retroactively. This prevents last-minute “auction sniping” and promotes more accurate price discovery (See the case for candle auctions).
Slot Duration & Lease Periods
Each slot on the Relay Chain can be leased for a maximum duration of 96 weeks. When bidding on a slot, parachains can choose the length of their desired lease by selecting a contiguous range of 12-week increments known as lease periods. Multiple parachains can win a single auction if they successfully bid on non-overlapping lease periods.
Each auction takes place over the course of 1 week and assigns a total slot duration of 96 weeks (divided into 8 12-week lease periods). The schedule is determined via Polkadot’s on-chain governance community.
Auction Ending Period
Each auction has an ending period that begins approximately 1 day and 21 hours after the start of the auction and lasts until the end of the 1-week bidding period. The auction’s end point can be any time within the ending period, and is automatically and randomly chosen by the VRF at the close of the 1-week bidding period.
Be part of blockchain history by helping kick start your favorite parachains.
Thoroughly research the parachain project and team, and read the details and conditions of their crowdloan campaign. Make sure you only get information from official channels. If ever in doubt, ask in the crowdloan Discord chat.
Learn how to protect yourself
Read for the basic tips on avoiding scams. If you’re inexperienced using blockchain technology, make sure you’re aware of basic best practices like how to protect your secret keys.
Determine where you will participate
Teams can choose to host their crowdloan campaigns natively on Polkadot and/or via third party intermediaries. For Polkadot-native crowdloans, you can participate on Polkadot-JS. If you’re less experienced using blockchain technology, you may find it easier to participate in a non-native campaign via third party platforms. Info on where you can participate in non-native crowdloans can be found here.
Create a Polkadot account
You’ll need a Polkadot account with a free balance of at least 5 DOT to contribute to a Polkadot-native crowdloan. See how to create an account on the Polkadot-JS Extension in this video tutorial.
Make your contribution
Watch the video below to learn how to contribute via Polkadot-JS.
Learn more about auctions and crowdloans in this in-depth video explainer and on the Polkadot wiki.
Lease & auctions
Have a question not answered here?
Join the crowdloans Discord chat.