Algorand Dutch Auction - What do you think?

Just bid low…If you miss it, then just move on to the next algo auction (or other project).

If you buy at 10$ and at the end of the auction the price goes to 1$ would you not get more Algos at the end of the auction?

As expected.

The Dutch Auction was not showing the real market price, it had a different purpose. Now we start to experience how the market really valuate Algos.

What’s even more interesting is that all the investors who participated in the auction are now interested in selling and seeing the price go even lower so that they can buy back in a year and refund for $2.16. The lower it goes, the more returns these investors will get. Given this, does anyone see how ALGO price can actually go up? Because I don’t. We have a selling pressure by the miners AND the investors are also interested in it going down. Would be interesting to watch this unfold.

I think once you sell there is no buy back anymore.

No, you don’t need to return the “same” algos. All you need is the same account you used in the auction. This paper goes into detail: http://arringtonxrpcapital.com/wp-content/uploads/2019/06/aXRPc_algorand_a_monetary_experiment.pdf

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All you need to do is to return same amount of algo you received at the auction.

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This indeed then allows for quite some crazy strategies. I am surprised about this. I would have restricted users to strictly hold their Algos on the account would they want to return it after a year. Like this indeed you had an interest to dump very fast and wait for as low price as possible to buy back.

What was the purpose of this incentive?

I’ve never been a fan of auctions of any kind, but I decided to participate in this one.

I’ve always believed that if you have a product to sell, set a price. If buyers want it and they think the price is fair, they’ll buy it. Otherwise, you can assume that the price you set is not fair and not palatable to the market.

This is particularly true of housing auctions. I see housing auctions as a way for sellers to appeal to baser human instincts in the moment, particularly FOMO, and graft more money out of the hapless bidders who often over extend themselves (thereby over inflating the market and cumulatively setting it up to crash). But who cares, right? I’ve got my money so nothing else matters.

Silvio stressed that the auction would allow the market to set the price of this new thing. It’s kind of true and it kind of isn’t. The auction set the price for the auction. Once that was over, the price on the open market plummeted like a lead balloon to begin to reveal the true value. Does the refund policy have something to do with the current price? Sure. Eventually though (how long is anybody’s guess) the market should stabilise unless another, similar auction is held. How else to get the tokens on the market though? Not another dutch auction I hope. There has to be a better way. After all, when the mint prints money, it does not auction it off.

I think the evidence indicates that the auction has failed to meet its price setting objective (although somebody is now tens of millions of dollars better off, so it met its money making objective). As an experiment, it was interesting, but it should simply be seen as an experiment, the results evaluated and the method adjusted or a new method devised if the results are not satisfactory (which is the case in my view).

This is all new. I like the technology and would like to see it succeed. The auction is a glitch that Algorand’s proponents need to address, but the concensus, forkless blockchain is a winner.

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