Bidding Auction is a type of auction where the Operator sets a minimum price (floor price) they want to receive for a token, and participants compete for the token by placing bids and raising the price. After the auction concludes, there is a designated time for the operator to accept bids (the operator has time to review offers below the floor price and accept some of them). Currently, the time for bid acceptance is set at 24 hours. After this period, all participants and the operator can finalize the auction and claim their tokens or funds. In various scenarios and outcomes, the contract distributes tokens according to the principles of "who bid more, wins" and "who bid first, wins." On the auction card, there is a "Winning bids" table that allows real-time monitoring of winning bids, including prices and the quantity of tokens won by each participant.
Bidding Auctions are labeled in blue, with the button labeled "Make a bid." These designations make it easy to distinguish between different auctions.
- Operator: The person creating the auction.
- Participant/Bidder: The person actively participating in the auction.
- User: A person unrelated to the auction who hasn't purchased any tokens.
How it works:
- The operator has the right to cancel the auction before it starts.
- The operator cannot bid in their own auction (this restriction is in place to avoid situations where the operator raises the price).
- A bid is automatically accepted when the bid price equals or exceeds the minimum price (but it doesn't necessarily mean that this bid wins).
- The operator can set a maximum number of tokens a user can bid on (e.g., for the sale of ERC1155-compliant tokens, where one resource can have several tokens, a limit can be set for a single user).
- In the case of two identical bids for the same price and quantity, the bid placed first is the winning bid. If the second person offers to purchase more tokens at the same price, the first bid is considered the winner. The crucial factor is the price per token and who bid first.
- Placed bids can be canceled or increased in the number of tokens or price per token until the auction is active.
- After the auction concludes, the operator has 24 hours to accept bids below the minimum price (acceptance is possible only if there are still available tokens).
An example of a not typical Auction situation (this example will show you how the rules exactly work)
If there are 6 tokens in the auction, and one bid is for the purchase of all 6 tokens above the minimum price, but the price per token is surpassed by another bidder who offers fewer tokens, say 2, those 2 tokens are won by the bidder who offered bigger price. The remaining 4 tokens are allocated to the person who placed the bid for 6 pieces. Here, the principle of who bid more and who bid first prevails, emphasizing the importance of the price per token in determining who gets the tokens.
In the next steps, we explain the Contract methods directly on the blockchain explorer