‘The Happening’ (Mass Auction of Restricted Web3 Domain Names) Part 2

This is an update on ‘The Happening’ For anyone who has not seen Part 1, which was published directly to LinkedIn, click HERE

Today, we start with looking at the progress of the auction and try to digest what is going on.

I’ve taken a screenshot of the top 10 so far by highest current bid price. The current price of the HNS coin today is $USD 0.03549. So the bid leader, .web with 250,000 HNS is currently at $8,872.50 , while the No. 10 spot is being held by .euro at 30,000 HNS which is $1064.70

This particular type of auction is called a Vickrey auction (named after Columbia University professor William Vickrey who invented it in 1961). The total sums seen in the column represent two components – a bid and a ‘blind’.

The ‘blind’ is a sum that gets locked in the auction until it ends. Bidders use it to disguise the real size of the bid. In the example of .web, nobody except the bidder themselves know how much they have bid.

All everyone else knows is that the bid is something less, or equal to 250,000 HNS ($8,872.50). The only way another bidder can be 100% sure to outbid, is to bid more than 250,000 HNS, even though the bid itself, what the leading bidder has actually committed, may be a lot less than this.

The 250,000 HNS total is called the ‘Lockup Amount’.

Early bidders often put huge blinds on top of small bids, in an attempt to frighten off other bidders and get a name cheaply. It is questionable to what extent the tactic has worked so far.

If we look at the column to the right of the HNS column we see how much time is left in each auction. It currently varies between a few hours under 4 days, to a few hours over.

.web already has 13 bids and one of them (I can see from my own system) – with 5,061.00 HNS ($169.61) Lockup Amount, is newer than the 250,000 HNS lock up, so it is probably all bid and no blind.

Further bids are highly likely to come in on these names between now and the end of the auction. All blinds are immediately returned at the end of bidding as long as the bid is ‘revealed’. This is done automatically by Namebase, but in self-custody wallets, it is a process.

In a Vickrey auction, the winner only pays the second highest bid. They will get refunded the difference. All unsuccessful bidders will get bids refunded.

Bid related Refunds have to wait the full length of the cycle. When a lot of high value names come on the market like this, even ‘whales’ can easily get their funds tied up quickly if they get too carried away with bidding.

This comes to the second type of strategy to maximise benefit from the appearance of a lot of high value or interesting names on the auction at once -waiting around until the last moment when many of them are going to end at the same block count, looking for a low bid opportunity, and jumping in with a bid just before the last block closing the auction, has been completed.

This is known as ‘sniping’.

This is a common tactic for those who can be flexible about what they want to win. Many people are focused on ‘flipping’ names (buying them on the auction and selling them later in secondary markets at a profit).

9ja Cosmos has a strategic approach to acquisitions and focuses on what can work in whatever is its active development project. We will generally not pay attention to opportunities outside our project focus, unless they are ridiculously cheap and notionally capable of offering quick return. Liquidity is important to progress our projects.

Invest at your own risk and always DYOR.

‘The Happening’ is a function of ‘Handshake’ – A PoW (Proof of Work) Blockchain, free to build upon and owned by nobody.

‘The Happening’ is not a function of 9ja Cosmos, Namebase, or any business built on the Handshake Blockchain mentioned here, or in continuation comments here, on LinkedIn, or any other platform this piece is ported to. Some businesses may choose to integrate aspects of ‘The Happening’ in their UI to serve their customers consistent with the nature of their products and/or services.