Gradual Dutch Auctions: Paving the way to innovate NFT sales

Paradigm, a cryptocurrency, and Web3 oriented investment organization strives to build newly created crypto-assets and enterprises. The San Francisco-based firm has proposed a strategy(Gradual Dutch Auctions) that would promote non-traditional marketplaces.

According to reports, Paradigm suggested introducing a Gradual Dutch Auction (GDA) mechanism to help the NFT marketplace by facilitating efficiency in asset transactions with illiquid markets.

The Gradual Dutch Auction works similarly to a Dutch Auction in that it divides transactions across a series of auctions. In a Dutch Auction, a bidder starts the auction by setting a high asking price and progressively lowers it until all of the items are sold.

GDAs, on the other hand, allow customers to launch several auctions for each of their items at the same time, consuming the least amount of gas possible. This gives the market more time to come up with a fair price for the goods.

Discrete and continuous GDAs are the focus of the venture capital business. Non-fungible tokens (NFTs) benefit from discrete GDAs, whereas fungible tokens benefit from continuous GDAs.

GDAs are a good way to sell fungible and non-fungible tokens that don’t have a lot of liquidity. 

Vidhi Narula
Vidhi Narula


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