[DAO:e18228f] Add GBM Auctions dApp as a stand-alone Decentraland auction house

Governance
1

by 0x89a1d730aa1e78a0ede8dea988acecff0a6e99a9 (Szjanko)

Linked Pre-Proposal

Integration of GBM Auctions in Decentraland’s Marketplace

Summary

Add in the GBM Auctions dApp as a stand-alone auction house for the Decentraland marketplace, where users can utilize Bid-to-Earn auctions to list and purchase their assets while earning $MANA whenever they are outbid.

Abstract

The Decentraland marketplace currently does not offer any type of auctioning. Auctions are a great price discovery tool for rarer items, ensuring sellers get the best market price. GBM Auctions is an incentivized auction mechanism where bidders make money when they are outbid- it’s a battle-tested product with over 70,000 auctions completed and over $200m in bidding volume. We believe the outcome of adding GBM will mean more activity on the marketplace, both in terms of listing items and people bidding and also better sales prices – all while members get a more rewarding experience earning $MANA.

Motivation

Currently, users can only sell for a fixed price using the Decentraland marketplace. This is not ideal, especially for rarer, more hard-to-value items- as it is difficult to come up with a starting price. Members either end up overpricing and not getting any traction, or under-pricing and leaving money on the table. This, we believe, has led to a slump in activity and listings- especially during the bear market where many users chose to sit on their assets instead of take to the market for fear of inadequate interest.
A price discovery system like an auction fixes this, allowing the market to dictate the price. We propose utilizing GBM Auctions which is a gamified version for web3 assets specifically where bidders make money when they are outbid- introducing not only auctions into Decentraland but a Bid-to-Earn component too.
The incentivization rockets activity as bidders are now incentivized to participate. It’s proven to generate more traffic and much higher sale prices- GBM’s existing partners have seen a 200% increase in sales price. For the bidders it also makes the experience more rewarding where they either win the item or earn $MANA.

Specification

We specifically propose to use GBM Auction’s dApp as a stand-alone auction house, so users can have another option. They can still sell via fixed price through the existing marketplace but now they also have a choice to use the separate auction house.
The dApp has the Bid-to-Earn bidding mechanism back end but also a front template which can be branded with Decentralands colors and logo to make it a more seamless experience. The fact that the front end is done already means the dApp is light effort to deploy and will only need a day or two of dev work. It can also be hosted as a subdomain, something like auctions.decentraland.org.
Incentives are paid out in $MANA (or whichever currency the auction is listed in) and happen in real time. Ultimately the incentives come out of the final sales price so there is a degree of control a seller can have in deciding what is the maximum incentive they are willing to give. The whole mechanism is completely self sustainable and requires no new liquidity to be added in.
You can see a full video demo specifically for Decentraland here
Loom | Free Screen & Video Recording Software | Loom

There is no upfront investment required. No fixed costs or monthly running fees, unless you would like GBM to set up and host everything, in which case there is monthly fee of around $1000, but if the foundation can do this themselves there is no cost. GBM charges a 2% fee only on sales made through GBM auctions. Fixed-price sales and other non-GBM transaction methods are exempt from this fee. Full project management support is also included.

Conclusion

We believe adding in the GBM Auction house dApp will make for a great addition to the existing marketplace, firstly by adding in an auction mechanism as well as a Bid-to-Earn gamified experience. This should have a big impact on activity, both on buying and selling and this has been proven from their existing clients and case studies already.
GBM has completed over 70,000 auctions and is working with The Sandbox, Rarible, Unstoppable Domains and Aavegotchi just to name a few. The founders are fully doxxed and have been working in the blockchain space since 2018, whilst being involved as early as 2013.

Hugo McDonaugh, CEO, DCL Username ‘ObiWanKenobi’ - Hugo McDonaugh - GBM | LinkedIn

Edouard Bessire, COO
https://www.linkedin.com/in/edouardbessire/

Guillaume Gonnaud, CTO
https://www.linkedin.com/in/guillaume-gonnaud/

There is no cost to implement, they are happy to support in integration and it does not over ride or force people to choose only this method, so we can not see any down side.

The first stage poll for this proposal also had a high level of engagement and backing from the community with close to 8.5m VP votes pushing for some sort of GBM integration and zero votes opting for leaving this out. With this level of enthusiasm we do believe the dApp will be used by the community and be a value add to the whole Decentraland ecosystem by increasing volumes and floor prices.

Vote on this proposal on the Decentraland DAO

View this proposal on Snapshot

2

Why is this proposal needed if this is done as a stand-alone? You don’t need DAO permission to do a marketplace auctioning DCL assets.

3

Hey @HPrivakos

There’s a few reasons here

When we say stand-alone we mean it’s part of the Decentraland ecosystem, just not fully integrated within the marketplace itself. A deeper whitelabel integration can be looked at later as that also had good support in the original poll- the standalone dApp could be the first step and prove out the model.

Setting it up this way for now means DCL and the foundation remains in control, we are not having to rely on a third party marketplace (and first get that third party to integrate GBM themselves).

The foundation would host it under an official Decentraland domain for more credibility and reach e.g. auction.decentraland.org and it would also be DCL branded.

Since DCL is setting this up within their ecosystem, they can also add in their own transaction fee so the DAO unlocks a revenue stream rather then giving it to a third party. They can also use it for Primary issuances if they wish to auction new drops.

Finally by being controlled, hosted and set up by DCL (even though the set up should be fairly straightforward) they can promote and the use of bidding/earning in $MANA, again something they would not have control over on other marketplaces.

4

Did you ask and get approval from the Foundation for that?
The DAO has no power over this.

1 Like
5

Being hosted on a DCL domain has always been part of this proposal, was in the stage 1 poll and written in the above stage 2 proposal too, as well as being mentioned during the demo video link.
We were advised to go through the formal governance procedure by them- but happy to have a conversation with the Foundation if there is a better way to speak to them.

1 Like
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Reminds me that maybe we can have a poll that goes direct to Canny for foundation review when it passes? Not sure how it would work but I think a poll to collect community sentiment and if that passes it goes to Canny for Foundation review. Still unsure why we need a governance process for such requests? @HPrivakos

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@DedHeadJ The original plan was to do a poll proposal and then post it to Canny, but I spoke with the Facilitation Squad and was informed to do the 3 stage governance process for this since it has to do with the marketplace. I am aware that this is not a proposal that the DAO Committee enacts, but I guess it falls into a gray area since it has to do with the marketplace (a gray area in terms of if the foundation will implement it). Will go through the last stage of the governance proposal at this point, and we can also post it to Canny if the foundation will require that before considering implementing this.

2 Likes
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Add GBM Auctions dApp as a stand-alone Decentraland auction house

This proposal is now in status: PASSED.

Voting Results:

  • Yes 99% 5,668,858 VP (55 votes)
  • No 0% 0 VP (1 votes)
  • Abstain 1% 2 VP (2 votes)