šŸ’ŸDEGEN Auction

Create your own auction in a frame

How It Works

DEGEN Auction is an all-pay auction based on the Penny Auction style.

Here it works: bids start at 1 DEGEN, regardless of the item's market value.

Every bid increases the price by exactly 1 DEGEN, no less, no more. If we draw a chart with all bids, we will have a perfect straight line.

Another key factor is that every bid is paid, meaning, the DEGEN gets moved and it will not be returned by the end of the auction. You can think of it as a bidding fee.

This creates some interesting incentives which make the DEGEN Auction behave somewhere between a traditional auction and a raffle.

  • Like traditional auctions: The winner is the highest bidder

  • Like a raffle: The winner gets the item for a fraction fo it's market price while the auctioner makes more than it's market price

  • Unique: Due to the sunk-cost fallacy, bidders have a higher incentive to bid multiple times. Since they have already spent money, they are more likely to bid again.

Finally, since the increase of every bid is paid, and it increases by 1 DEGEN, the curve that represent the funds is easy to calculate and it is best represented below. Total funds formula totFund=maxBid22totFund = \frac{maxBid^{2}}{2}

Example

If we auction an NFT worth 5,000 DEGEN, how many bids would we need to break even?

Given the equation for the revenue curve, we can invert that equation to calculate the breakeven for our auction: 2āˆ—Price=Bids\sqrt{2*Price} {=} Bids

Therefore, for our NFT of 5,000 DEGEN, Bids=2āˆ—5,000Bids {=} \sqrt{2*5,000} => Bids=100\color{blue} Bids {=} 100, so we will need 100 bids to break even.

That means the winning bidder would get the 5,000 NFT for 100 DEGEN.

Summary of Auction Dynamics

  • All bids are paid, "Bid Fees"

  • Every bid increases by exactly by 1 DEGEN

  • Every bid increases the auction time by 30 minutes

Cost

We charge between 3% and 5% of the funds received during the auction

To mint the frame, it will cost 0.002 ETH (Base network)

This money will be used for the gas necessary to settle the auction (moving the NFT and the funds received to the respective final wallet addresses)

Supported NFT Chains

ChainERC-721ERC-1155

Base

Coming Soon

Optimism

Zora

Ethereum

Polygon

Supported Bid Token and Chains

ChainDEGENNative Token

Base

Degen L3

Coming Soon

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