Batch Auctions (Uncapped)

What is a batch auction?

A batch auction is a launch mechanism designed to offer a fair, inclusive, MEV-resistant model for a pre-defined amount of tokens to be auctioned off. For both capped and uncapped batch auctions, users can pledge tokens within a subscription period for a share of the newly emitted tokens.

Uncapped auctions

Uncapped auctions operate on a proportional share basis, where the amount of project tokens received by each participant is directly related to their contribution relative to the total amount pledged. This allows all users to get their fair share of the token’s auction amount, at the tradeoff of not knowing ahead of time what this proportion will be. This allows for users to have the same opportunity to purchase tokens all the way up until the end of the subscription period.

• Efficient Price Discovery: Batch auctions facilitate an efficient price discovery process by aggregating orders within a specific timeframe. This aggregation allows the market to set the token's price based on collective demand rather than on a first-come, first-served basis, minimizing price manipulation and ensuring a fairer valuation at launch.

• Reduced Slippage: For participants, batch auctions provide the advantage of reduced slippage, especially in comparison to traditional order book markets. Since the price is determined after aggregating all bids, participants receive their allocation at a consistent price, irrespective of the order size, leading to more predictable and equitable outcomes.

• Democratic Participation: By allowing participants to submit bids over a period, batch auctions democratize access to token purchases. This model prevents the dominance of early participants or large holders, ensuring that all interested parties have an equal opportunity to contribute based on their valuation of the token.

• Flexibility in Auction Design: Batch auctions offer project teams the flexibility to design the auction according to their specific needs, including setting minimum and maximum price limits, adjusting the duration of the bidding period, and determining the allocation methodology. This adaptability allows projects to tailor the auction to best fit their community and liquidity objectives.

• Enhanced Liquidity Provision: Post-auction, the aggregated and balanced nature of batch auctions can lead to enhanced liquidity for the token on secondary markets. The equitable distribution of tokens and the establishment of a market-validated price contribute to a healthy trading environment, encouraging broader participation and liquidity.

• Cross-Chain Functionality: In the context of platforms like Bazaar, Batch Auctions can be integrated with cross-chain solutions, enhancing liquidity and participation across multiple blockchains. This opens up greater market access and diversification for both projects and investors.