Reference material fyi:
Link to original: Polkadot Parachain Slot Auctions | Polkadot
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.
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.