How does a parachain auction work?

Asked 4 years ago

Hi guys, I'm still uncertain about how parachains work. I want to take 80 DOT and stake them, but what are the odds that they will increase my limit? Is there counterparty risk to them?

Parachain auctions Parachain Counterparty risk

Marco Flynn

Tuesday, June 07, 2022

Parachain auctions are auctions held on the Polkadot or Kusama relay chains to establish the next parachain connection to the parachain slot. When auctions start, all the network projects are eligible to submit bids to the relay chain. Both Polkadot and Kusama auctions work similarly, and participants bid using their offer amount and slot period. If your auction does not win, you will access it after the parachain slot ends, and because the process is done on-chain, they do not have any counterparty risk. 