What are Dutch Auctions?

Dutch Auctions are a market structure where the price of a good with multiple units, is established by taking in all the bids at varying quantities. Once the entire collection sells out, everyone has the same entry price.

Dutch Auctions are incorrectly used in NFTs, where people pay on a sliding scale depending on time and demand - with some paying a lot while others pay a little (especially if they wait until the end and it does not sell out). Oftentimes, the DA is abused to create the perception that the community established the price.

Harsharn Singh
Investment Associate | Ember Fund

Thank you for reading!

Don't forget to come into the app tomorrow to continue learning about crypto!