Gnosis, a builder of new market mechanisms for decentralized finance, has now launched Gnosis Auction, a platform that uses batch auctions to enable fair price discovery for token auctions.
“With ICOs and token launches notorious for creating volatile and erratic price points, the method behind discerning what a new token should cost is complicated. Gnosis Auction has been designed to address this issue, allowing new token launchers to now ask their audience what it’s worth in a completely fair and permissionless way,” said Stefan George, Gnosis Co-Founder, and CTO.
Using Gnosis Auction — projects launching new tokens on Ethereum can use a custom Gnosis Safe App to deploy an auction, setting a minimum price they’re willing to sell their token for, while those bidding can set a maximum price they’re willing to pay.
Overall, the price will settle somewhere in between the two, keeping both sides of the equation happy – when the auction closes, all bidders within that range receive the same clearing price.
By combining limit orders and batch auctions, Gnosis Auction introduces a fundamentally new auction primitive to decentralized finance on Ethereum.
Furthermore, batched auctions prevent frontrunning and problematic ‘gas wars’, in which users might manipulate and congest the network, which means less value will be extracted from the process.
Beyond initial DEX offerings, Gnosis Auction enables users to run collateral or liquidation auctions, as well as token buybacks, and any other experiments that are interested in finding the fair value of a token.
Gnosis developed the permissionless platform that teams can use to run auctions, however, they are not involved in the auctions or auctioneering, which are independently organized by users of the platform.
The latest in a long and successful list of Gnosis tools for decentralized finance, Gnosis Auction will allow for fair, accessible, and efficient price discovery, solving a long-standing issue within the crypto industry.