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Auctions

Bidding and Settling an Auction#

Auctions play a key role in a DAO as the main form of perpetual funding. The frequency of an auction is set by the founder when the DAO is created. Once the DAO has been initialized it will hand over control of the auction house to the treasure and start the first auction.

  • Duration: How long an auction runs/how often a new NFT is created
  • Reserve Price: Min bid amount required to start an auction
  • Min Bid Increment: The min percent greater a bid must be than the current highest bid to be valid. Nouns builder default sets the minBidIncrement to 10%. For example, if the current highest bid is 1 ETH and then the next bid must be 1.1 ETH or greater
  • Buffer: The time window in the final minutes of an auction when a new bid can reset the timer. The default time buffer is 5 minutes, meaning that a bid in the last 5 minutes of the auction resets the timer to 5 minutes.

Creating a Bid#

Anyone can create a bid by calling createBid and passing in the tokenId of the NFT that is currently being sold. Note, submitting a bid within the range of the buffer time will reset the auction timer to the buffer time. The DAO defaults to a 5-minute buffer meaning that a bid in the last 5 minutes of the auction resets the timer to 5 minutes.

Also, a bid must be equal to or greater than the minBidIncrement amount which is set to 10% in the DAO by default. For example, if the current highest bid is 1 ETH and the minBidIncrement is set to 10% then the next bid must be 1.1 ETH or greater.

// @notice Creates a bid on an NFT. Note the ETH is sent in the value field of a transaction.function createBid(uint256 _tokenId) external payable nonReentrant

Starting and Settling an Auction#

Once the first auction has been started by initializing the DAO, perpetual auctions are set into motion. Setting the auction is done by calling settleCurrentAndCreateNewAuction which allows the winner to claim the NFT. In addition, the same transaction mints and starts the next auction for a new NFT.

/// @notice Settles the current auction and creates the next one    function settleCurrentAndCreateNewAuction() external nonReentrant whenNotPaused {        _settleAuction();        _createAuction();    }