Seed starter plugs, peat and and pellets provide a loose medium for starting seedlings. Peat moss pellets are shipped compressed and expand when watered. They can be placed in any sort of tray, and plastic form fitted trays are available with pellets included.
Open trays may dry out if placed near vents or windows. Sealed wet trays can produce mold unless ventilated. Balance airflow with watering to avoid mold. Placing a small amount of bleach or vinegar in the tray bottom can also prevent the mold growth.