Introducing eBay-style Auctions for Crypto Collectibles

Until now, non-fungible tokens have been missing gas-free auctions where the highest bid wins.

Alex Atallah
Feb 10, 2019 · 5 min read

What’s the best way to sell crypto collectibles? Their value is based on market demand, which is hard to measure, and there’s no “Kelley Blue Book” for pricing them. So you have to put them on auction, and until now, only the seller was setting the price curve.

Now, on OpenSea, you can let buyers compete to find the best price for your item or bundle of items!

An English Auction on OpenSea. Link: https://opensea.io/bundles/etheremon-starter-kit-english-auction

Two main types of auctions

But the type of auction that most people think about is the English Auction, where you list your item for a minimum price and accept the highest bid after a set time period. This is the type of auction made popular by eBay* that you see for physical items there, and now it’s available on OpenSea. Here’s what the two price graphs look like, side-by-side:

A Dutch Auction from CryptoKitties.co on the left, and an English Auction from OpenSea on the right.

Why English Auctions can be better

What about buyers? Buyers love English Auctions, which feel like games with winners and players. Most importantly, as long as the starting price is low, buyers don’t have to know the market value. Dutch Auctions essentially require buyers to know the true value because buyers purchase hoping that they saw the item at the right time, and therefore the right price. In reality, determining price involves a conversation between more than just one buyer and one seller, and English Auctions enable that.

For example, let’s say a CryptoKitty with a market value of 0.5 ETH is currently on sale for 1 ETH and declining to 0 ETH over 2 months. Along comes a buyer who doesn’t know how much it’s worth. The buyer might purchase the item out of fear that someone else will snag it later, even though it’s currently too high of a price. In an English Auction, the seller will list the CryptoKitty for a low-ball guess (e.g. 0.4 ETH), and if demand for the kitty truly is high, then its price will naturally rise to 0.5 ETH as buyers outbid one another. It’s a multi-party conversation about value where every party has skin in the game, which has until now hasn’t had a first-class experience on OpenSea.

Gas-free for both buyers and sellers

Creating an English Auction for a testnet CryptoKitty on OpenSea

How does this work? It’s a three-step process. First, sellers create auctions by creating and signing an off-chain sell order, which OpenSea stores off-chain with the OpenSea API. This involves no gas as long as the seller has already approved those assets for trading.

Second, buyers create buy orders in the same way, which also only requires signatures. To bid on an item for sale in an ERC-2O token like DAI (a stablecoin pegged to $1 USD), they just need to approve the token and have enough of it. If the item is on sale for ETH, buyers need to wrap ETH into W-ETH, which can be done when bidding or any time using the W-ETH Station on OpenSea. This allows the trade to happen when the buyer is asleep, without the need to escrow ETH into some non-standard contract, and the seller will receive W-ETH instantly that they can unwrap into ETH at their discretion.

Finally, when the sell order expires, OpenSea’s servers look for the highest buy order that’s at least the minimum amount specified by the seller, and pays the gas to match the two together. For the first time ever, no user (not even the order taker) needs to pay gas to fulfill the final transaction!

Bundle Offers

As an added bonus, if your bundle expires or you cancel it without finding a buyer, it’ll still be available for buyers to find and make offers! And a new “Re-list this Bundle” button makes it easy for you to quickly bring it back to auction and renegotiate a price. We hope this will make it easier for everyone to trade complex bundles and talk $ to sellers without spamming them.

Give it a try!

If you’re a developer, we’ve also added support to the OpenSea SDK for programmatically creating English Auctions, querying for them, and bidding on them. You can even add an address as a referral address and claim referral bounties, both through the SDK and by creating referral links.

For more information, or if you have any feedback, contact us on Discord or email us at support@opensea.io!

* Despite the widespread belief that all eBay listings are English auctions, most eBay listings are fixed-price now.

OpenSea

Buy, sell, and discover rare digital items

Alex Atallah

Written by

Co-founder of @ProjectOpenSea | previously @YCombinator, @PalantirTech, @Apple

OpenSea

OpenSea

Buy, sell, and discover rare digital items

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