Five minutes to understand Gnosis Auction auction mechanism and operation guide

introduction

First put the official link.

Quoting official introduction, Gnosis Auction is a fairer, more transparent and decentralized token price discovery platform.

He has three obvious characteristics:

• to eliminate robot arbitrage. Gnosis Auction does not take the form of buy-and-close transactions, but uses separate bidding and unified settlement. Therefore, arbitrage transactions cannot be carried out before the end of the auction period.
• Stop being forced to chase high. Gnosis Auction and LBP have different auction methods based on AMM transactions.Therefore participants will not be forced to chase higher. You only need to set your own psychological price. The psychological price of everyone together forms the final transaction price.
• Reduce subsequent expected consumption. Usually, auctions are only the first step in public distribution, and there are more important links behind, such as Listing. Many projects have excessive consumption of expectations during the auction, resulting in insufficient stamina for subsequent Listing. Gnosis Auction is restrained on this point, conserving market energy for the project party, and making the entire public distribution process more gradual.

auction mechanism

Different from Dutch auctions, fixed-price sales, etc., Gnosis Auction adopts a "batch auction", which is simply:

• separate bidding _li32_ul li
• li unified liquidation

  users cannot directly buy auction tokens into their wallets like on LBP, but need two steps of order pending and liquidation. The pending order interface is as follows:

  

  You need to set two parameters:

  • Unit price: that is, your psychological price of the item's Token. For example, 1 DEV = 2.68 DAI shown in the figure.
  • Purchase amount: the amount you are willing to purchase at the unit price. For example, 122 DAI shown in the figure.

  Then we can simply make a conjecture, assuming that the final auction settlement is 1 DEV = 2.68 DAI. Then the order can get 45.52 DEV.

  But as I just said, you can't get the token immediately after you submit the order. You need to wait for the unified liquidation after the auction period ends. Whether you can make a successful purchase depends entirely on the liquidation process. Therefore, it is very important for us participants to understand the principles of liquidation.

  clearing

  Before introducing settlement, we’d better understand two important price indicators:

  Min Sell Price (the lowest acceptable price)

  Min Sell Price is set by the project party Price bottom line, if you set the unit price when placing an order is lower than the bottom line, you cannot submit the order.

  Current Price (current clearing price estimate)

  Do not be misled by English. Before the auction ends, this parameter is a clearing estimate calculated based on the total order situation in the current auction. It provides us with a price reference for the final transaction price, that is to say, this is an important reference indicator for your pending order bid. But this price changes dynamically with the increase and decrease of pending orders. Therefore, the closer the auction ends, the closer the price will be to the final settlement price.

  Note: Before the auction ends but is not settled, the Current Price will be changed to Clearing Price, indicating that the clearing price has been fixed. After the settlement is completed, the Clearing Price will be changed to Closing Price again, indicating that this is the final closing price and the settlement has been completed.

  So how is this clearing price calculated? This involves the clearing mechanism of Gnosis Auction. After the auction period is over, Gnosis Auction will start the automatic liquidation work. In short, it is like this:

  Remember the two values ​​you filled in when you placed the order? Unit price and amount. Gnosis Auction will sort all orders according to the unit price from high to low, and then combine the amount of these orders to accumulate in the order of price from high to low.What's the accumulation? Cumulative Token quantity. Let's look at an example.

  

  The picture above shows an auction situation. Each square in the figure represents a Token. The X-axis (horizontal) position of the square represents the price (low left and high right), and the Y-axis represents the number of tokens at different prices.

  Combining the knowledge points introduced above, we can see from the above figure that the acceptable reserve price for this auction is 21 USDT, and the two tokens with a price of 20 are not within the scope of liquidation (in fact, the order cannot be submitted ), therefore, the clearing range of this auction is all orders from 21 USDT to 30 USDT, a total of 34 Tokens.

  Assume that the total supply of tokens in this auction is 21 tokens. Therefore, we need to filter out the qualified 21 tokens from the 34 token orders. Well, the liquidation begins.

  • 30 USDT: 3 Token
  • 29 USDT: 6 Token
  • 28 USDT: 4 Token
  • 27 USDT: 5 Token
  • 26 USDT: 3 Token _li32Tli _ul3726 USD p1 , To reach the total supply of tokens for this auction.

    The key point is here, 26 USDT is the clearing price of this auction. At the same time, this action also determines who succeeds in the auction and who fails the auction:

    • All orders that have just been included in the calculation are considered valid orders
    • All orders that are not included in the calculation are considered invalid orders. That is, the order whose unit price is lower than the clearing price.

    So, how are these valid orders traded? The practice of

    Gnosis Auction is,It will not be settled at the price when you placed the order, but will be settled at the final settlement price just calculated (for example, 26 USDT in the example). In other words, even an order with a pending unit price of 30 USDT will eventually be settled at a settlement price of 26 USDT. Is everyone happy? !

    liquidation seems to be a very complicated process, but there is a trick that can help you grasp the essence of it without the brain. There is a chart on the auction page, look here:

    

    The dotted line (vertical line) in the figure is just now The Current Price mentioned is an estimate of the current liquidation price. The further to the right of this line, the higher the price, and vice versa. So you only need to pay close attention to this line, and you can know:

    • How much price you should pay to ensure that you are not eliminated as much as possible
    • Is your already placed order in the danger zone

    ### Advance

    If your routine is rough stud, then please skip this part and go straight to the "tips" part. If you want to take a closer look, let's go a step further and learn more about the other important parameters of Gnosis Auction:

    

    These values ​​show the basic information of the auction.

    • Total Auctioned: The total amount of tokens in this auction (remember the total supply of tokens mentioned in the liquidation calculation just now?)
    • Current Price and Min Sell Price: I have already introduced them in detail just now, do not repeat
    • Minimum Fuding: The minimum total auction amount set by the project party. If it is lower than this amount, the auction will not be liquidated, and everyone will go back to their respective houses. Of course, the money you have invested can be recovered.
    • Estimated Token Sold: Simply put, it shows the current sales performance, which is what percentage of the total sales volume has been completed. This is an important indicator,It will be mentioned in the tips section!
    • Min Bidding Amount Per Order: The minimum order amount allowed for each order. Remember the two parameters mentioned in the pending order section? Unit price and order amount, this parameter is the minimum limit for a single order amount. Combined with the Min Sell Price parameter, your pending order must exceed these two minimum limits, otherwise, your order cannot be submitted.

    Tips

    Finally, I would like to share some experiences with you, which may make your participation process smoother.

    Feel free to put the unit price higher

    The clearing mechanism of Gnosis Auction is introduced above, it will not settle the token for you according to the unit price of your order (unless your bid is exactly equal to the final clearing price) , But will take the lowest price in valid orders as the final clearing price. Therefore, you can safely put the unit price higher. Why? This way you are more assured of being included in the valid list.

    Always pay attention to the dotted line

    The dotted line in the chart is introduced above, which is an important risk warning. As mentioned earlier, this line will change dynamically, even if your bid is higher than this warning line when placing an order, you may not always be in the safe zone. If you do not want to be eliminated, please pay attention to this line at any time. If your pending unit price is equal to or lower than this line, you need to pay attention to it, and judge for yourself whether you need to cancel the order, adjust the price and re-enter the order.

    pay close attention to price trends after 100% sales performance

    When the Estimated Token Sold parameter reaches 100%, Current Price becomes active.Even the magnitude of the change may be large. This means that your pending order is in turmoil. If you want your pending order to be in the list of valid orders, it is best to pay close attention to the Current Price and react in time (withdraw the order, adjust the unit price, and re-enter the order).

    Refresh the webpage diligently

    The key values ​​you see (such as the current clearing price estimate) will be automatically refreshed after you initiate a pending order transaction. However, if you have not made a pending order transaction, the web page will not be automatically updated (slot point). Therefore, if you want to know the latest situation, it is best to be more hands-on and refresh the web page.

    Don’t rush, just place an order when you think about it.

    Gnosis Auction is not the same as LBP, you don’t need to rush, it won’t get any chance or advantage because you enter the market early. Therefore, you must first carefully understand all the parameters of the auction, and then carefully consider how to bid, and then place the order after you think about it. Although Gnosis Auction supports order cancellation, Gas still pays. So, think before you act.

    Summary

    The auction mechanism of Gnosis Auction is more inclined to fair distribution than FOMO. At the same time, its auction mechanism naturally solves the problem of robot arbitrage and makes the auction process healthier. Of course, it also has several shortcomings, including when entering the order, there will be a freeze when entering the value, and the data will not be automatically updated at regular intervals, etc. However, in general, Gnosis Auction is a mild auction method, not radical, very calm, and very suitable for community release of projects that focus on long-term health. Finally, I remind everyone, please manage your own risk and control, and remember to blindly follow the trend.

    .