9 ♠ · Strategy · Draft
Reverse Dutch Auction
An auction where the price starts high and falls over time until a buyer accepts it.
How it works
The seller sets a high starting price, a floor price, and a schedule for the drop. The auction opens and the price ticks down on that schedule, for example every block. Buyers watch and wait. The first buyer to accept the current price wins, or, for a token sale, buyers commit funds until the falling price and the committed funds meet. Everyone in a token sale then pays that same clearing price. The seller never has to guess the right price in advance: the market finds it.
Use it when
- You sell a new token or NFT and have no idea what the market will pay.
- Avoid fee bidding wars by letting price, not speed, decide who buys.
Watch out for
- Fear of missing out: buyers rush in at the top and the price never falls.
- A starting price set too low sells out at once and looks like a fixed sale.
Example
Gnosis. Gnosis sold GNO in April 2017 through a falling-price auction that closed within minutes, at a price far above what many expected.