| description |
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Increases the start price for the temporary premium added when names expire from $2,000 to $100,000. |
| Status | Executed |
|---|---|
| Discussion Thread | Discourse |
| Votes |
When a name expires, it goes through a 90 day grace period, after which it becomes available for general registration. To prevent it becoming a race to register, a ‘temporary premium’ is attached, starting at $2000 and diminishing to 0 over 28 days. Done properly this results in a dutch auction for the name.
When the premium was set, $2000 was roughly the 98th percentile of all auction prices for the short name auction, and seemed like a reasonable starting price. Today, we’re seeing multiple reports of names, particularly 3 character names, being snapped up by bots the moment they become available at the maximum premium.
Long-term we can improve the mechanism by setting the initial premium based on the base price of the name (so 3 letter names start off more expensive than 5+ letter names), and by introducing a nonlinear pricing curve (for example, having the price diminish by 1% per hour for 28 days). In the short term, however, I’d like to propose setting the initial premium to a much higher value, which we can do with a simple transaction from the DAO account.
Research of current trends shows:
- 2,798 names have been bought during the temporary premium period so far.
- Of these, 340 (12%) were purchased the moment they became available.
- Registrations of names during the temporary premium period have been on the increase since the DAO launched in November.
- 12 names have been purchased at a premium and flipped on OpenSea; the most valuable of these, punk.eth, went for $85,636.
Accordingly, I propose increasing the temporary premium from its current value of $2,000 to a new value of $100,000. This will ensure that the start price exceeds the secondary market resale value of almost all released domains, and corresponds to a rate of decrease of just under $150/hr, meaning that less valuable domains will still have a multi-hour period during which people can purchase them before the premium expires.
In parallel, work should be initiated on a new nonlinear premium model, so that high initial premiums can be combined with a slow decrease towards 0, allowing both high and low value names to be bid on fairly.
- Deploy a new instance of the
LinearPremiumPriceOraclewith the initial premium set to 100,000 USD and the period set to 28 days, with other pricing variables identical to the current oracle. - Call
setPriceOracleoncontroller.ens.eth, passing in the address of the new price oracle contract.
TBD