THE FLRDROPS ARC:
Besides set-price sales and offers, FLR Drops will feature various auction methods for Artists and Collectors to buy and sell artwork. Below we provide some insight into some of the auction types that will feature within FLR Drops. This list will be updated, and more auction types will be added as time goes on.
The Scottish type auction is an ascending price auction with a predetermined duration. It typically begins with a starting bid or reserve price for the sale item. Subsequent bids need to be higher than the previous bid. During the last hour of the auction, each new bid will extend the auction duration by 15 minutes. The highest bid at the end of the auction period wins the auction. Scottish is the most common type of auction in the web3 space.
The Dutch type auction is a descending price auction with a predetermined duration. It typically begins with a high starting price and decreases until a participant decides to buy at a desirable price or a reserve price set by the seller is reached. This type of price auction is most commonly used for goods that are required to be sold quickly, such as flowers, fresh produce, or tobacco.
Dutch auctions have also been called clock auctions or open-outcry descending-price auctions. This type of auction has the advantage of speed since a sale never requires more than one bid. It is strategically similar to the type of auction discussed next.
First-Price Sealed-Bid Auction
The First-Price Sealed-Bid auction (FPSBA) is a blind auction where participants submit a single bid, which is concealed until the end of the auction. When the auction period concludes, the highest bid revealed is the winner. If a reserve price was set by the seller, but it is higher than the highest bid, then the highest bid is considered an offer and can be accepted or declined by the seller.
The Japanese type auction is a subscription event. Participants register their interest to be included in this turn-based auction. Typically, the starting price is low or begins at a reserve price, and participants either improve on the previous bid or exit the bidding process. After exiting, the participant cannot re-enter the bidding process. The last standing participant who did not exit, holds the highest bid. If no reserve was set by the seller, then the highest bid is considered an offer and can be accepted or declined by the seller.
Reservation price (also known as Reserve Price)
The Reserve price is the lowest price a seller is willing to accept. If the reserve price has not been met once the auction ends, the item will not be sold. Sellers then have the option to change the reserve price or accept the highest offer that resulted from the auction.
Introducing Auctions to the Songbird and Flare NFT markets through FLR Drops allows greater flexibility for Artists, Curators, and Collectors alike. In future articles, we will explore more ways FLR Drops is providing innovative tools and solutions for the NFT Art community!