English Rental Auction

Summary

The English Rental Auction is like a standard English Auction, but for rentals. Bidders compete during the bidding phase to secure the lease with some minimum and maximum duration set by the asset owner.

Bidding

Bidders place their bids during the bidding phase. Once the bidding phase ends, the winner of the auction starts their rental.

Bidders are allowed to submit their bid in the form of a flow rate provided that it surpasses the previous highest bid. To avoid spam, bidders are required to make a deposit to cover the minimum rental duration in the event that they win the auction. If the bidder does not win the auction, their deposit is returned.

To prevent auction sniping, the bidding period is extended if a new highest bid is placed close to the end of the period.

Once the bidding phase ends and a winner is chosen, the auction transitions to the renting phase.

Renting

After the bidding phase ends, the winner starts their lease. The renter can cancel their lease at any time but if they do so before the minimum rental duration elapses they lose part of their deposit (specifically, they lose depositSize - amountPayedSoFar).

Once the renter cancels their lease or the maximum rental duration elapses, the auction returns to the bidding phase.

Parameters

A new English Rental Auction takes the following parameters:

• Currency

  • The asset that renters will pay with

• Minimum Bid Factor

  • When placing a bid, it must be at least this factor times the next highest bid.

  • For example, if the minimum bid factor is 1.05 (for 5%), then if Alice bids 100 DAI/day, then Bob must bid more than 105.

• Reserve Rate

  • The minimum rate of any bid. If the reserve rate is set to 1 DAI/day, any bid must be at least 1 DAI/day.

• Minimum Rental Duration

  • The minimum duration any renter has to pay for.

  • If Alice bids 10 DAI/day and the minimum rental duration is 7 days, she has to deposit 70 DAI upfront when she bids, and the asset owner is guaranteed to receive at least 70 DAI from Alice.

• Maximum Rental Duration

  • The maximum guaranteed duration of a lease

• Bidding Phase Duration

  • The duration of the bidding phase. The countdown starts after the first bid is placed.

• Bidding Phase Extension Duration

  • The minimum amount of time between a bid being placed and the auction transitioning to the rental phase.

  • If the extension duration is 1 hour, the bidding phase is set to end at 1PM, and Alice bids at 12:30PM, the bidding phase will be extended until 1:30PM.

• Controller

  • Address of the controller contract

Visual Overview