Considering Future Approaches: Thoughts on the Auction System

Development
#1

As you know, users are now able to register domain names directly, make unsolicited offers and will soon be able to list domain names for a fixed price.

For an overview on these changes please refer to the medium articles below.

The Direct Registration System:

Unsolicited Offers and More:

In the initial stages of the Solana Name Service (SNS) it was essential to adopt the auction system in a way to ensure fair distribution and to prevent squatting. The current changes, however, allow users to manage and obtain domain names in the absence of an auction taking place.

Since an adequate time frame has lapsed and we believe domain names have been fairly distributed, we are considering that the auction system may have served its purpose. Be that as it may, it brings some uncertainty on how to move forward with SNS.

Currently, the auction system is still being used for reselling domain names. We have received mixed reviews from users in terms of either abandoning and/or keeping the auction system. Therefore, we would like to start an open conversation to collaboratively share some ideas.

At first glance I see two possible options:

(1) Get rid of the auction system completely, that is, “resells” and focus purely on fixed priced listings and unsolicited offers.

We understand the concern here is that a lot of users generate their sales from the “Ending soon” dropdown and individuals outbidding each other. In saying this, if you are for option (1) please provide some suggestions on how to mitigate these concerns shared by other users.

(2) Keep both the auction system and the recent changes made.

Our fear with adopting option (2) stems from the possibility of overwhelming new SNS users. Considering all the available options, it could present some barriers to entry/adoption which we would obviously want to avoid as well. Therefore, if you are pro option (2) please provide suggestions on how we could make this system as efficient as possible.

Ultimately, this decision would never take place without a DAO vote. We want to start this discussion so we can move forward as a united front. We will not move forward unless we have a clear idea from all community members with proper input! This is merely a conversation starter.

Please share your ideas/suggestions.

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#2

Option 2 is my vote. Keep and add features.

  • I have had zero unsolicited offers in over 3 days or so since they started. At least 800 domains. Not one. Not even a lowball.

  • All my domains over the last 3 months have been sold with auctions. Not buy now.

  • Auctions allow for a domain that multiple people want to reach far larger sales amounts. Bidding war. Price discovery. I have had domains I thought were worth less sell for 10x-20x what I thought.

  • All other sites (domains, NFTs, ebay, mercari, everything…) use auctions as an option in combination with buy now.

  • Auctions have been a key part of selling things since at least 500 BC in Babylon. They work. Wikipedia has some great history on them :slight_smile:

  • Sites that sell NFTs can use “buy now” more easily because NFTs are easily parsed by very specific traits. Domains are not so. They are very subjective and collectors like to scroll through the ending page to see what they might like after they find it, or to find a deal, or a mispriced name. This is one of the most relevant things here. Most names that people resell now would not be found or sold through static sales. Even with filters.

I think there is always this desire to constantly build new features for a service that sells things. But I would warn that taking out things that WORK is unwise and could lead to failure.

I think keeping auctions, providing static options, and filters will not confuse people. Everyone knows how auctions work. And it’s been working great.

If it works - don’t try to fix it.

1 Like
#3

Also, I think the twitter poll should have said “auctions for resold domains”. I would bet the vote would change from 50/50. I think some people still think SNS uses auctions for new registrations. I have seen them say this on twitter. And I think if half the users want to keep a feature - it should stay.

I really am trying to help you guys and I think getting rid of the main working feature of a service (that every site uses) is kinda … a bad idea.

I know the new registrations are flying like hotcakes - let us resellers keep our ways :slight_smile:

1 Like
#4

In terms of what could be added-

  • Option to create a static never ending listing that can be cancelled anytime. Buy now with no auction.
  • Ability to add tags to all listings. Food related, gaming related, web3, crypto, etc…
  • Filters for search. Categories. 3 letters, 2 letters, numbers, industries etc…
  • Filters by price, domain length, time ending.
  • Would love for people to be able to make sub minimum bid offers for auctions that are running but I know that is tricky.
  • Ability to “chat” in the content area of the domain somehow. To discuss price. And then owner can delete this content or disable it.
  • Ability to verify Emoji domains are legit - outside of the “exclamation mark”. People seem to not want to buy emojis like they used to. ZWJ is a legit function. Would love to find a way to remove marks on 100% legit emojis.
  • Ability to search Emoji domains and Unicode, ASCII ones.
  • And good one - ability to make offers on multiple domains simultaneously with the same funds. And if offer is accepted on one and not enough funds for the rest - they auto cancel.

Just a few off the top of my head.

1 Like
#5

I vote for 2.

My thoughts are the issue can maybe be broken down into three values:

  1. Seller experience.
  2. Buyer experience.
  3. New user experience.

We want all three to be well met, and if any one is failing then the whole system falls apart.
From a sellers perspective, he wants to sell with as little work as possible and find the buyer who’s willing to pay the most. Auctions allow the option for the seller to optimize for the latter, at perhaps a sacrifice for the former.
From a buyers perspective, he wants to be able to seek and purchase a desired name at lowest cost ASAP. Direct purchases probably fit the needs for most buyers here, but still they may benefit from having the option to look at auctions as it’s really just an avenue for potential bonus opportunities they can optionally choose to seek – nothing negative for them to just exist from the buyers perspective.

The auction system is nothing but positive addition for 1 and 2, but perhaps it could be argued that it reduces 3. So with that in mind I think the simplest solution is we keep the auction system, but perhaps update the frontend with small UX changes to help out the new users. Obvious ones are filters for names, say fixed-price listings, auction listings, min-bid. Maybe also update the frontend to look less like it’s only for auctions – it might be a bit confusing for users to go through the auction UI atm to directly register a name for example.

As a bonus point: I really think the unsolicited names are a great addition since they now give more control and convenience to name owners out-of-the-box. From a buyer’s perspective though, they’ll likely not use it much unless some external factor has given them incentive to, e.g. if an influencer is advertising “their name is for sale, just give them offers”, or maybe you make communication with someone, etc… the point is they’d probably not just make an offer on a random name hoping it to work since it might not get accepted and then it’s just funds sitting idle (unless they really really wanted it, and ofc theirs on-chain messaging and stuff :slight_smile: ). So in other words, it really gives power to the name owner to advertise there name and whatnot is for sale and stuff like that which is great. One idea I had that might be interesting is somehow sort-of mixing the difference selling methods. As in, the seller makes a commitment in some way that tells the buyer he’s serious on selling it ASAP and is accepting offers. Maybe it’s like, user pays a fee over duration it’s listed for sale, incentivizing them to sell it ASAP, and there’s a cancellation fee if an offer exists to incentivize them to take the offer rather than back out (or maybe don’t allow backing out altogether). So it’s kind of like an indefinite auction. I think it could be neat to allow price discovery, and it might have it’s own neat dynamics like simulating “last-moment auction frenzy bidding” in case bidders anticipate the seller will take the offer quickly (maybe this is a variation where the fee is in proportion to the current bid?). That’s the general idea, there’s probably a formal/common name for it but it’s just an idea I had so IDK, indefinite auction is what I’ll call it for now; there’s also probably a few different variations with different characteristics and such. Don’t expect this to be implemented btw (at least in the foreseeable future), but just thought I’d share it.

Really happy to see community feedback is well considered, and really thanks Selene and the rest of Bonfida for always keeping up and trying to constantly improve. :slight_smile:

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#6

I think these are really nice thought and ideas :+1:
You say it best, my post is always not very concise haha.

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#7

Speaking as a seller: Needs more exposure

DigitalEyes lists Bonfida domains, but SolSea & MagicEden does not. The 2 major volume marketplaces on Solana, and there’s no SNS section. Even OpenSea has a category for ENS.

Bonfida frontpage should also display random .sol domains to help seller’s get exposure and possibly their first sale.

A statistics page would also very much help, but perhaps an official one by the Bonfida team! See https://solanafloor.com/domains

2 Likes
#8

Actually I wonder if ME or Solanart would be interested if they could get 2% of sales or something. I would be fine with paying 2% of my sale for listings that sell on Magic Eden.

#9

You guys have valuable points here. Thank you for laying them out so nicely.

@Yoyodyne I think you have some good ideas with expanding on categories and tags. Overall I’ll summarise these ideas shared by you and @beano so we can see which would work best and how we could possibly incorporate/display them. I agree that these would be beneficial for exposure.

@beano I’m intrigued by your idea, but not sure I understand completely, that is:

user pays a fee over duration it’s listed for sale, incentivizing them to sell it ASAP

Would you mind expanding? Would an indefinite auction not essentially be a fixed price listing? To quiz a little further; I assume this would only be applicable to auctions? I am a somewhat confused about logistics of this.

To touch on the point of secondary marketplaces; this is for sure something we are working on. In the meantime, we are trying to make our own platform more diverse, to meet as many of our users needs as possible. It is always helpful when users report this to the desired marketplaces, in a way to show there is a real demand for SNS. @Yoyodyne I would presume all secondary marketplaces are incentivised to sell, whether it may be NFTs or domain names.

@springroll there is a “Random” dropdown on the page. Are you saying a “Random” dropdown for domains that aren’t in auction? If so, I would have to check with the devs to see if this would be possible.

Appreciate the contributions! Keep it up.

1 Like
#10

Sure.

So first thing to note is that it wouldn’t replace any of the other methods of selling domains, instead imagine it as it’s own separate method which adds yet another option for them to choose with it’s own unique tradeoffs; so it’d be different from fixed-price and regular auction listings.

The main differences are:

  • Compared to fixed-price listing, it is different because it’s an auction in the sense that it’s bid on rather than sold directly, so ending sale price can end up higher and a potential buyer isn’t guaranteed the name if he bids, etc…
  • It is different from auctions in that there’s no duration timer, so it can potentially go on indefinitely.
  • And the most important difference compared to both other methods from the seller’s perspective is that the sale would require a second manual step to conclude the sale. So it would require time and interaction from the seller, they can’t necessarily list it and let it automatically sell on its own.

Upon further thought, I figure maybe it would work like this:

  • When the seller lists the name there is a parameter that must be specified called “decay rate”.
  • When someone bids on the name, their bid begins to decrease in value (i.e. decay) over time, so it incentivizes the seller to accept the offer ASAP, or alternatively they can choose to risk losing value in this particular bid if they think someone will bid higher. So with this method, the bid is constantly decreasing based on the decay rate.
  • The bidder won’t be able to cancel his offer if he is highest bidder, but he’s able to claim back part of the bid that has decayed, at any time (imagine it similar to how user’s claim staked farming rewards from farming protocols).
  • If the decay rate is set relatively low, it essentially means that the seller might take his time and not accept the bid for a while. Whereas if it is short, the seller would likely have to accept it ASAP which also may attract more of a bidding frenzy. Another way to think about it is the tradeoff of exposure vs attracting potential bidders. Imagine, from a sellers perspective if the decay rate was low he might not want to bid at all since they might think there’s high probability the seller might not accept bid soon, so there might be higher chance of getting outbid in that time, and in the extreme case if it decays incredibly slow then their funds might get stuck in the auction for a long period of time. So likely it’d make sense to make the decay rate limited to something moderate, maybe a max of 7 days for a full decay or something.
  • Decay rate could perhaps be implemented in different ways, try things like making it follow a curve so it’s not linear or something.

So it’s kind of like unsolicited-offers mixed with auction method.
The main reason to use it are:
From a sellers perspective:

  • It can act as a way for organic price discovery without having to sell the name in case things are less than they’d like. To illustrate with an example: with traditional auctions the seller may list at a bad time so it goes for WAY less than it could’ve if it was listed a day later (just the nature of auctions being highly sensitive to exposure). To mitigate this loss, they could set the min-bid value, but then this isn’t really price discovery as it’s based on seller’s preconceived notion of it’s value; and if the min-bid to high it may not get bid on so no price discovery information, or even if it is bid on, then it’d likely only get one bid and go for what the seller set.
  • It offers its own unique auction price action dynamics (i.e. the reason for users to bid higher is slightly different to regular auction), which may or may not be preferred compared to auction for whatever reasons.
  • The main price action isn’t condensed to the last part of the auction since there is no last part. They could list it and as long as there is exposure it could begin a bidding war at anytime.
    From a buyers perspective:
  • It’s yet another avenue for them to potentially find a name they desire.
  • Compared to unconditional-offers, it gives them more confidence that the name owner will sell it to them.
  • Compared to auctions, there is no ending duration so they could potentially get their name ASAP.
  • They could see how long a name has been listed, and based on that judge whether it’s worth them bidding. i.e. Stale listings might not get bid on as much.

So I’m still not completely sure exactly how it’d go, but that’s the overall idea.

Maybe to describe its (potential) implementation a bit more:

  • Seller is allowed to cancel at anytime. Or actually, maybe even better, they don’t even “list” it in the first place and it’s all just handled similar to like unconditional offers, and maybe they just making a listing to act as a sort of promotion/advertisement for it and also for specifying decay rate; and then ofc they could cancel that promotion i.e. The name is always kept in possession of owner like how unconditional-offers work currently. I think that is possible? Not totally sure.

I think overall the idea makes some sense, or at least interesting in my mind. I’m curious on other’s opinion or if it’s been done elsewhere. Not sure if the potential usage justifies investment to it being built though. Assuming there is no flaws is it something others might be interested in using? Perhaps I could try building this but it’d probably take a while so not suitable for riptide hackathon thingy.

#11

Hmm, maybe this idea is more complicated than necessary.
I think actually when the idea is refined down, one could get sort of the same benefits by simply adding an “advertisement/promotion listing for name accepting unsolicited-offers”. Mainly because unsolicited-offers allow for price discovery potentially similar to auctions just by themselves.
So you could have a page of on-chain adverts for names looking to take best offers.

The whole decay idea I think tries to eliminate the unpredictability part from the fact that some offeror can just pull their offer at anytime. That might have it’s merits but I’m not convinced yet it’d be worth the added complexity.

But the overall idea of “helping out” the unsolicited-offers method of sale via on-chain advertising I think does have value. Seems lucrative enough for a whole on-chain advert program/protocol to exist for all sorts of things. Has it been done yet? If not I feel like it’s a good idea I might try building it!

#12

So - a big one would be a way to make an offer under the minimum price or bid. So if there is a static listing (buy now) or a timed auction a user can make an offer on a live listing that is below the minimum to buy the domain. I know there is an issue with the fact the system uses metaplex and the domain is no longer under ownership of the seller.

Could there be a way to communicate the intent to pay below asking? I know jabber was the initial solution but could there be a way for anyone with a wallet to “write” the intent to pay a certain lower amount? Or “field” to enter on the site … like a scratchpad. This could be turned on and off by the seller or buyer maybe. Does it have to be onchain?

It doesn’t have to be a part of a contract per se. Just an intent communicated by a potential buyer that if the domain was listed for less it would be bought.

On another note. Is there a way to keep a link visible during sale to the current owners wallet address so buyer can see what other domains the seller has for sale or owns? The domain “comment” being visible during active sale would also be huge. The comment can be used to put an e-mail or twitter link for sales discussions.

#13

Thanks for adding this! Huge! Profiles… very cool. Incorporating fixed prices, offers, auctions, and a “sellers store” in a way that works great.

I just used my “favorite domain” on the new profile page to make a domain that says to “make me offers” lol…

Another idea – An area of the site that shows just user profiles (wallets). Top holders or something. This might also boost sales through fixed prices and unsolicited offers. And would be fun too. I can spy on the big guys…

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