I love auctions, but it’s very difficult to do them on a blockchain because all bid information is totally transparent.

When you participate in an auction on Ebay, you place your maximum bid but don’t neccesarily have to pay that, unless someone else bids up the price to just under your maximum bid. On Ebay, nobody can see your maximum bid, so someone bidding against you has to take a risk that they will become the maximum bid in order to try and bid you up to your maximum price.

Back in 2014 we built a token auctioneer, it was entirely built around on-chain transactions, basically we set up an “Auction Address” which people would place bids with by sending their maximum bid. The system would bid the minimum to make them the high bid, but then people would know exactly how much to bid by looking at the blockchain and either using that information to maximize the price the bidder was going to pay, or to outbid them by a single interval.

On Ebay, you don’t get charged per bid you make or action you take. In your proposed system, you would get charged every time you make a change and the bidding settlement periods you are proposing are perfectly set to be trolled indefinitely by making tiny bid increases days into the waiting period but before it actually ends. Every time I do this, I force the legitimate bidder who wants the thing to a) wait longer, b) pay another fee, c) pay more.

To make that information not matter, you make it so placing a bid is not auto-bidding based on price, but that someone sends their entire bid. The problem here is that you have to make a lot more bids in a contentious auction and since the auction has no fixed end time this can go on indefinitely.

After our experiment with the auctioneer, which we eventually shut because the perfect-knowledge situation was creating asymetric results for sophisticated bidders vs. normies, we came up with a better plan for creating a token auctioneer. It neccesarily can’t be done entirely on the blockchain if you don’t want everybody knowing what everyone else is bidding.

So to summarize, I like the idea but I think doing it entirely on-chain will be a huge non-starter because a) costs, b) time a user needs to be engaged with an auction which has more than one bidder, c) non-intuitive, asymetric advantage for sophisticated users over normal users.