- Author: Brennan Mulligan (RareDAO Foundation)
- Status: Approved
- Type: Protocol Modification
- Implementer: RareDAO Council Multi-Sig
- Sponsors: Charles Crain (@lordcharles)
- Proposal link: Snapshot Voting
- Created Date: March 19, 2025
Summary
We propose lowering the minimum bid increase for auctions and the minimum price increase for competing offer from 10% to 1%.
Background & Motivation
The bazaar smart contract, the primary onchain marketplace of the Rare Protocol, has a parameter for the minimum price increase required for competing bids in an auction, or when submitting an offer which out competes another user. Currently this is set to 10%, meaning that each bid in an auction must be at least 10% larger than the previous bid. Likewise, if User A has submitted the first offer on a piece and User B wants to offer a higher price, the price that User B offers must be at least 10% higher than User A.
This parameter exists to prevent trolling by repeatedly outbidding or out-offering others without significantly raising the artwork’s price, which forces users to spend gas and disrupts price discovery. However, the current 10% bid increase hampers price discovery and competitiveness, especially in high-value auctions, where bidders may have to raise their bids by tens of thousands of dollars.
With the primary goal of enabling fair and efficient price discovery on all auctions and offers, we propose setting the minimum bid increase amount to 1%. This is large enough to reduce trolling on medium - large auctions where it may still be worth hundreds or thousands of dollars, but not so large that users are discouraged from bidding in the final stages of an auction.
Specification
In order to change the minimum bid increase amount, we will call the setMinimumBidIncreasePercentage fucntion on SuperRareBazaar.sol (deployed to address 0x6d7c44773c52d396f43c2d511b81aa168e9a7a42) with a value of 1 (where it is currently set to 10). The function may be viewed on etherscan here.
Benefits
- Increased bidding activity in the later stages of medium - large auctions where the previous 10% minimum increment per bid would have discouraged competition, resulting in more efficient price discovery and potentially higher auction prices.
- Increased competitiveness between offers, allowing for artists to get more signal from the market on the perceived value of their work before agreeing to a sale.
- No additional smart contract risk as we are simply modifying an existing parameter on the bazaar smart contract. No new code is being deployed.
- This is not a “one way door”, meaning that future proposals may overwrite this SIP by interacting with the same smart contract function and setting it to a different value.
Drawbacks
- Decreasing the minimum bid increment may enable some amount of trolling on very small auctions, however we think this risk is negligible due to gas costs outweighing any benefit at that price level.
- 1% may still be too high of a minimum bid increment for very very large auctions. However these are relatively rare, and we believe the proposed value strikes an ideal balance for the vast majority of transactions.
Implementation
Given the extremely simple nature of this proposal, we will use oSnap for automatic execution using the processes established in [SIP-20] Add oSnap to RareDAO. As such, when creating the proposal we will configure the smart contract interaction described above which will then be visible on the proposal page for the duration of voting. Once voting completes, a short waiting period will commence, after which the oSnap module deployed onto superraredao.eth (the Council multisig) will automatically execute the transaction.