tl;dr: So far, we’ve had a smooth launch and the Raiden Dutch Auction works as expected.

The Raiden Network Token same-price Dutch auction launched Wednesday at 15:30 UTC, so it’s been running for roughly 36 hours now and things are very much as expected.

Comparing the KYC registration numbers with the actual bids we’ve seen, most participants act rationally as they are staying put for a reasonable implied value of all tokens, rather than bidding at the current (unreasonably high) price. Although in the end all participants get the same price, waiting has the advantage of controlling the max price one is willing to buy at.

No Hype, no FOMO, no Bullshit

While this might not be the obvious strategy for a project doing a token launch, we’ve chosen to be responsible and have a modest approach to communications where “No Hype!” was our internal guiding principle.

For the token launch itself we wanted to make sure that participants are able to make an educated decision before buying tokens without being tricked by FOMO (“Fear Of Missing Out”) tactics like early participation discounts, soft caps, pre-sale discounts, individual caps and other unfair structures.

Dutch Auctions are fair and transparent

We decided on a Dutch auction as the token launch mechanism, as it can, if properly set up, offer certainty of participation while at the same time providing certainty of valuation. Another advantageous property of Dutch auctions is, that they have a built in anti-hype mechanism. The dominant strategy of a prospective bidder is to not hype the token launch, since that behavior would lure in more buyers and drive up the final price of the auction.

As earlier explained in this blog post and this video, Dutch auctions start at an impossibly high price and implied value of the supply, which decline over time. Participants know the maximum price they are going to pay for tokens as well as the maximum value of all tokens at any point in time. One should only bid once the price seems reasonable from their own perspective. We tried to make this clear by stating this in the subtitle of the token sale page.

We further went to considerable lengths to give participants the tools to clearly see the current and past status of the auction, as well as being able to see at which date a certain price will be reached.

This allows one to set an alarm for a future point in time and only bid once the implied value of the tokens is at a certain level.

Preliminary Conclusion

So far we are very happy to see that our Dutch auction works as expected. There was no rush and rationality can clearly be seen. Potential participants in our chat room seem to be happy that the token launch didn’t close after three minutes and that they get certainty about the maximum price they’d buy at. Also the bigger buyers we are in contact with are acting professionally and waiting for the price to drop to more reasonable levels.

While in the end everyone will get the same price, we are still curious to see how this will play out over the next few weeks. We’ll keep you updated.

But for now relax and cheers!

The Raiden project is led by brainbot labs Est.