What is a polkadot parachain auction?

A Polkadot parachain auction is the process that determines which blockchains will be allowed to lease a slot and connect to the Relay Chain. These parachain auctions are very similar to traditional auctions. The first batch of Polkadot parachain auctions started on November 11th 2021. It includes 5 auctions, with 1 new auction starting each week.

What happens if a project wins a polkadot auction?

If a project wins an auction, they will lease a parachain slot on the Polkadot network for up to 2 years. A parathread is a parachain that only participates temporarily on the Polkadot network. Instead of taking part in the parachain auction to acquire a lease, they pay to participate on a block-to-block basis.

How does Polkadot work?

Polkadot will use a random beacon based on the Verifiable Random Function (VRF). The VRF will provide the base of the randomness, which will retroactively determine the end-time of the auction. The slot durations are capped to 2 years and divided into 3-month periods. Parachains may lease a slot for any combination of periods of the slot duration.

How long does a polkadot auction last?

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).