What are some best auction practices?

Tips for a successful and enjoyable auction

It is always important to remember that we run a fully on-chain auction system. If you are a seller, you will have to lock your NFT in a smart contract in order for the auction to start. This is not unlike listing an NFT for direct sale. If you are a bidder, you will also be locking your bid in the smart contract and this will be returned if you got outbid. At the end of an auction, either the seller or the winner will be able to initiate the settlement and this sends the winning bid to the seller, NFT to the winner, royalty payment to the collection creator, and auction service fees to RaggieStore all in the same transaction.

What are some points to remember when creating an auction?

Firstly you need to be aware of the fees involved and ensure that you have sufficient funds to cover the transaction. In terms of how you run your auction, it is generally a bad idea to set a starting bid that is way above the expected price of the asset. Remember that if no one bids in your auction, you are still liable to pay the listing fee. When starting an auction, you have the option to set a starting bid, bid increment, start time and end time. Always bear in mind that bidders are given 3 bidding options - from 1x increment to 3x increment. Therefore if you set a low starting bid with small increments, bidders are likely going to feel your auction to be too cumbersome to follow. Conversely if you set a large increment, you may miss out on bidders who are comfortable to outbid a current bid by a margin smaller than what you had set. Also remember that this is an on-chain auction system and Cardano uses an eUTxO model in which each UTxO can only be consumed once. Whenever a bidder bids, the UTxO in the smart contract holding your asset will need to be consumed and locked back into the smart contract in a new UTxO. This means that if multiple bidders attempt to bid at the same time, only the bid of the bidder whose transaction reaches the blockchain first will be valid. The rest will all be rejected. With this in mind, it is generally good practice to allow ample time for interested bidders to consider and decide. Therefore it is advisable to set an auction time frame that is at least 24 hours long to cater to bidders from all time zones.

What are some points to remember when bidding in an auction?

For all participants in our auction system, it is crucial to remember that this is a fully on-chain auction system. This means that your intention to bid is recorded on chain by locking your bid in a smart contract. Because there can only be one successful bid at any point in time, any bids that have been outbid would have been returned back to the unsuccessful bidder. This means that withdrawal of bids will be an unfair move as previously leading bids cannot be reinstated on-chain without initiating another transaction signed by the previous bidder. As such, we do not allow withdrawals. Only bid in an auction if you are willing to pay the bid as your bid is final and will not be returned unless you get outbid.