Periodic Auctions

[will-holley]

• Requested by Matt (@anoanoano)
• Holders need to feel secure in their possession and be able to better predict their holding period to maximize investment (akin to a lease)

Mechanics

• Fixed time: block to block start/end
• Continuous auction – whoever holds it at the end of the auction period locks in stewardship
  • Avoid clustered bids at the very end: each bid within t-window of closing pushes the bid window (e.g. bids within last 30 minutes push end out 20 minutes)
    • Public bids or commit-reveal (blind) scheme? [Graven]
    • Reveal
      • is it possible to have a time-dependent zero-knowledge reveal?
      • https://litprotocol.com/ – all nodes agree to release key at a certain time
      • Encryption
        • Each bidder encrypts their bid with a public key and the pk is used to decrypt all bids simultaneously?
        • Encrypt the address so that other bidders can't view wallet balance and predict max bid
        • Requires central (off-chain?) intermediary
      • May require placing a deposit as collateral on each bid; collateral amount may reveal info on bid?
        • Solution A: Call ERC20 approve with amount = max bid + random int [Similar to Space]
• Reserve Price?
  • Clean-slate: bidding starts at zero
    • Matt's mild preference – "intuitively it feels weird to build in a system where people don't have to engage; auto-pilot disincentivizes people paying attention to their valuation"
    • Is there a transition between auto-pilot over the short term (monthly) and the longer term (annually)?
  • Dutch-auction down from previous-lease price into a subsequent bid is put in (previous lease-holder inherits the lease by default if no other bids)
    • How are people paying the taxes and fees? If deposit can exceed lease time, different implication: don't expect to need to re-auction [Graven]
• Price Paid? Highest bid or second highest bid (Vickrey)
  • Highest: true self-assessed value?
  • Second: blind, pays the second highest
    • How does this impact bidding true self-assessed value?
    • Regular: should always bid lower than true subject-valuation; if bidding true then you earn 0 when you win
      • Doesn't reveal true subjective-valuations