Dragon Chalices are needed for playing levels. Each level costs a certain amount of chalices to play which increases if you leave a level and come back without finishing it.
You can have a maximum of 7 chalices and they refill over time. It takes 1 hour to refill one chalice or you can spend Dragon Gems to refill them in one go.
Since July 2018, players will sometimes be offered a chance to watch a video for one extra chalice. This offer may appear as a pop-up on the chalice display in the world map or on the level screen of levels which the player has too few chalices to play. Sometimes even when no offer appears on the worldmap, one may appear from inside the level information screen. This offer does not always appear, and there may be a limit to how many times a player will be allowed to watch ads for chalices.
A big change to chalices came in version 2.0.0. Chalice cost increased in all levels where it was possible for golden seeds to spawn noticeable in Fjord 8 and Sun Vedth 5 they used to cost 1 chalice but cost 7 as of 2.0.0. At any case any potential level would have become 7 chalices as the player re-entering the level enough times, making the gold farms wasteful unless bank capacity is very big.