Explaining the $BOSON community token flash sale mechanic

Overview

The $BOSON token is the core economic unit of the Boson ecosystem. Growth in the value of the network is driven by establishing an economic flywheel, following the dCommerce sustainability.

On April 1st, we will begin our community token distribution. In this distribution we will make 6 million $BOSON tokens available for sale, which will become immediately available for use by our token holders at the conclusion of the sale process.

>> To access our Public Sale page , visit:

Bossonprotocol.co

Sale format: Batch auction

We will be using the newly announced Flash sale Initial Decentralized Offering (IDO) which provides a fair, transparent way for the community to acquire $BOSON tokens.

The sale will last for a set period of time, where anyone will be able to bid to buy BOSON tokens for a minimum of 0.75 USD.

Important: Any bid to buy tokens at this price or above will be collected and stored until the end of the sale process.

When the auction is complete there will be a master contract finalization. The smart contract ranks the bids in price order and selects the group of bids that together represent the sale of tokens for the highest price. All bidders pay the lowest price of all qualifying bids. Tokens will then be claimed by the winning bidders via a ‘reclaim’ function that the users must use.

The diagram below sets out the approach:

In the diagram above, every orange bids get filled at the price of the lowest accepted bid (Final Price)
  1. The auctioneer starts by gathering all the bids and sorting them out according to price.
  2. The auctioneer works back from the highest bid until all the shares are sold.
  3. The final price that fills the quota of shares to sell becomes the offering price to all successful bidders.

This type of sale is known as a “batch auction” and is extensively used in traditional financial markets as a means of determining a fair price of an asset, for instance during an IPO.

All buyers pay the same price, and at least in a rational sense, should be happy whatever the outcome, either they purchase the tokens at or below the price they believe ‘fair’, or they do not participate in the sale.

Flash Auction User Flow

In Gnosis Auction, there are two types of participants: one seller and multiple bidders (also EOAs or SCs).

1. The seller sets four parameters:

  • Sell token and bid token
  • Amount of tokens to sell
  • Minimum price willing to accept (ask price)
  • Auction duration (preset)

2. Once the auctions starts, the bidders get to start placing bids by setting the following parameters and submitting a transaction:

  • Approved token (if first time)
  • Select amount of bid tokens willing to commit to the auction
  • Select maximum price willing to pay

After submitting the transaction, the bidder’s bid will be valid, and the amount of bid tokens that she selected would be subtracted from her balance.

3. Once the auction concludes, the auctioneer submits a transaction which will calculate the closing price. Closing price is calculated using the following method:

3.1 Bids are gathered by the smart contract and sorted from highest to lowest price

3.2 The smart contract works back from the highest bid, adding each bid’s amount of tokens to buy, until the original amount to sell is reached

3.3 The bid that adds up the amount of tokens to sell is selected as the final closing for all participants.

3.4 Participants that selected a maximum price at the final closing price or higher receive tokens, the ones that had selected a maximum price below the closing price are left out.

4. After the price has settled, the auctioneer will receive the proceeds of the auction, and the bidder will need to submit an additional transaction to claim the tokens bought (or the tokens used to bid with, in case the bid didn’t get filled).

Why a batch auction?

Flash Auction is a platform enabling fair price discovery for token distributions. The aim is to make it easy to discover a fair price for their token through the format of a batch auction.

  • The auction will run for a fixed period of time, and all bids will be evaluated.
  • There is no first-come-first-serve race, and all participants have an equal chance to acquire tokens, based on their bidding price.
  • Any participant can select the price at which they are happy to buy BOSON tokens at any time without time pressure

We have selected this mechanic as it is a fair system to enable community distribution, where an easy interface is provided for price discovery.

Flash Auction enables:

a) Token issuers to determine a minimum price they are willing to sell their tokens for (ours starts at $0.75 USD), and

b) Bidders to set the maximum price they are willing to pay in the form of limit orders.

The group of highest offering bidders that together will buy 6 million tokens all will pay one clearing price, which is the lowest price qualifying bid.

The starting price of the auction is $0.75, and if all 6 million tokens offered are sold at that price, the Boson Protocol project will raise a further $4.5m USD. Any unsold tokens will be returned to the Foundation ecosystem development fund for future use.

What makes this mechanic fair?

We are committed to the idea of capture resistance for commerce, that decentralized software can enable communities to work together to secure the outcome that is best for the greatest number of participants.

In this form of token offering, we are asking the community to set the price of the $BOSON token, based on the collected desire to own the asset, and be part of the ecosystem as it grows.

Our aim is to avoid an exclusionary process, where only a limited number of people can participate, either by a lottery, or by first-come-first-served mechanics.

Instead, we are creating a set time period, where anyone can bid to acquire $BOSON tokens, at a price that is acceptable to them.

Frequently Asked Questions?

Is there a minimum and maximum bid?

There are no minimum or maximum bids. The minimum bid value is $0.75 USD per token. Any buyer can offer to buy any amount of $BOSON tokens for the price they believe to be acceptable.

Why do you believe this sale format is fair?

This sale format enables all participants to purchase $BOSON tokens at or below the price they believe to be appropriate. Either they receive tokens at the ‘fair’ price, or they receive their bid back. From a rational standpoint, participants should be equally happy with either outcome.

What price will I pay if I make a bid?

As a bidder, you choose what price you are prepared to pay for the $BOSON tokens, and how much capital you wish to commit to buy tokens at that price. You will never pay more than that amount for $BOSON tokens and you may pay a smaller amount.

You will pay the lowest qualifying price that anyone pays. All successful bidders in the public sale will pay the same price.

Here are some examples:

Example 1: perfect match

100 tokens are for sale

Bidder 1: 50 tokens at $0.75

Bidder 2: 30 tokens at $0.8

Bidder 3: 20 tokens at $0.9

Result: 100 tokens sold at $0.75. Bidder 3 gets 20 tokens, Bidder 2 gets 30 tokens and Bidder 1 gets 50 tokens.

Example 2: over demand

100 tokens are for sale

Bidder 1: 100 tokens at $0.75

Bidder 2: 100 tokens at $0.8

Bidder 3: 50 tokens at $0.9

Result: 100 tokens sold at $0.8

Bidder 2 receives 50 tokens and bidder 3 receives 50 tokens (both at the price of $0.8 per token) bidder 2 also receives $40 back (the $ equivalent of the 50 unfilled tokens).

Example 3: under sale

100 tokens are for sale

Bidder 1: 20 tokens at $0.9

Bidder 2: 20 tokens at $1.5

Bidder 3: 20 tokens at $3.0

Result: 60 tokens sold at $0.9, 40 tokens returned to foundation wallet

Example 4: whale purchase

100,000 tokens are for sale

Bidder 1: 100,000 tokens at $0.8

Bidder 2: 50,000 tokens at $0.9

Bidder 3: 2,000 tokens at $1.2

Result: 100,000 tokens sold at $0.8

Bidder 1 receives 48,000 tokens, bidder 2 receives 50,000 tokens, bidder 3 receives 2,000 tokens

What happens if I make an unsuccessful bid?

All bids are maintained in the auction contract for the duration of the sale. At the end of the sale if you have not been successful, your original bid amount can be withdrawn from the auction contract.

How can the auction be manipulated?

The principal means of manipulating the auction is to make very high bids and then cancel them late on in the auction process. The high apparent clearing price will discourage other bidders, then the cancellation will reduce the clearing price, allowing conspirators to secure a lower price than they otherwise would have paid.

This risk is mitigated by the ability to cancel bids being curtailed after a period of time in the auction, and by requiring bidders to commit funds to the auction smart contract before their bid is valid.

Will the auction be dominated by whales?

We believe this approach is more whale-proof than other sale formats, as all bids are transparent. All a bidder needs to do to buy tokens ahead of a whale, is to be prepared to pay 0.01 USD more per token than that whale, and their tokens will be assigned to them ahead of the large purchaser.

Does it matter if I complete KYC twice?

No, it does not matter how many times you complete KYC, there is no limitation on the number of bids you make or from the number of wallets you do it from. The auction mechanic only requires whitelisted bids to be in the set of highest price bids in order for them to earn tokens.

I have whitelisted an exchange wallet, can I participate?

No, you must whitelist a wallet you are able to interact with smart contracts with, via Metamask or similar tool. If you have whitelisted an exchange wallet you will need to re-authorise a new wallet by passing KYC a second time

What are the risks?

With any cryptocurrency related activity you should be aware you are dealing with highly volatile assets. Only spend what you can afford to lose. Similarly there are inherent risks associated with interacting with smart contracts that you should feel comfortable about before participating. For a full list of terms and conditions, please refer to our terms and conditions page

What is Boson Protocol

Boson Protocol is building an open tokenized economy for commerce. It automates digital to physical redemptions using NFTs encoded with game theory. Our core technology disrupts e-commerce platforms by tokenizing real-world products and services and commerce data within a liquid digital market, powered by DeFi infrastructure. We call this decentralized autonomous commerce.

Powerful e-commerce platforms have captured the market. These monopolistic intermediaries extract excess value. They claim to value customer-centricity when what they are really doing is hoarding data and separating people from the value they create.

What is needed is a way to execute commerce transactions trustlessly with minimized human intermediaries or arbitrators. You can read more about our approach in our Light Paper.

The $BOSON Token

The $BOSON token is the core economic unit of the Boson ecosystem. Growth in the value of the token is driven by establishing an economic flywheel, following the dCommerce sustainability loop.

The dCommerce DAO will fund projects that build core Boson Protocol software, applications, tools and integrations, as well as ensuring the growth of the ecosystem via temporary growth policies, such as supply and demand farming.

Revenue generation from projects and initiatives is funnelled back into the DAO, with a fraction of all revenue being used to buy and burn $BOSON. To get the “economic flyweel going part of the “ecosystem rewards’’ fund (see below) is used to fund the dCommerce DAO until it is self sustaining.

The sustainable base funding of the dCommerce DAO is ensured through a minimally extractive fee on transaction coordination and data monetization.

$BOSON token holders will govern the dCommmerce DAO, for more info see our Governance design principles and $BOSON ecosystem value flows articles.

About Boson Protocol

Boson Protocol’s vision is to enable a decentralized commerce ecosystem by funding and enabling the development of a stack of specialist applications to disrupt, demonopolize and democratize commerce.

Keen to learn more? Read our Lightpaper:

https://docsend.com/view/p7g9u8d8wiwnf9jn

In a hurry? Check out our One Pager:

https://assets.website-files.com/5fa40658a63ff659399bba09/60511aa6d05330bf55b03989_160321_Boson_OnePager.pdf

Want to dive deeper? Read our whitepaper.

Lastly, if you’re a decentralization enthusiast, please follow us here, on Medium. We will post frequently about our dCommerce journey and would love to hear your comments!

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store