Registered domains can pass through a number of different stages. Transitions that they can take are dependent on the stage that they are currently in.
Domains that are available can be immediately leased. Users will be required to pay leasing fees for one or more years. Leasing fees will be dependent on the length of the domain name.
Leased domains will be represented by ERC721 tokens. The owner of the token will be able to top up leasing fees, transfer the token, and make use of the token (i.e. by using the naming system).
If the registration of a leased domain expires, the domain will enter into a grace period. During this grace period, the owner of the domain will not be able to perform any actions using the token (e.g. setting records on the domain, transferring the domain, etc.). The owner will have the option of reclaiming the domain by paying the lease fees on the domain during this period.