Editor's Note: This article comes fromHay's theory, Author: Heifeng Li, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Hay's theory
At 21:00 on the evening of October 5th, the first auction of DEGO NFT will start. This auction is an NFT named "Sotoshi Nakamoto (Satoshi Nakamoto)", which is minted from 10,000 DEGO, calculated according to the currency price of DEGO tokens at that time , the face value of the NFT is about 35 ETH. The initial starting price was 1 ETH, which soared to 117 ETH in just 90 minutes, and the final price fell to 129 ETH, nearly four times its face value, equivalent to about 303,000 RMB.
The opening price of the first auction not only benefited from DEGO’s tricky gameplay, but also from the recent popularity of DEGO projects. We can see from the data on the Ethereum chain and the popularity of social media that DEGO has been pushed to DeFi and NFT is on the cusp of these two markets.
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Ethereum Gas consumption ranking (data source: Etherscan.io)
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Ethereum Gas consumption ranking (data source: Etherscan.io)
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Ranking of Ethereum Dapp daily active users (data source: Dapp.com)
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Search results for Dego.finance in Youtube
The enthusiasm of the entire DEGO project has set off a storm in the NFT market. The auction price of 129 ETH seems unbelievable, but it is also reasonable.
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1. A case of sky-high NFT auction
The sky-high price of more than 100 ETH has precedents in NFT auctions. The following two cases appear in the fields of NFT domain names and NFT encrypted artworks.
NFT domain name: Amazon.eth
In October 2019, Ethereum domain name provider ENS released a one-time auction of 3-6 character domain names on the OpenSea trading platform. Among them, the Amazon.eth NFT domain name was finally fired to 100 ETH, which was 100 times higher than the starting price. .
According to the price of ETH at that time, the domain name was worth more than 120,000 RMB. Compared with the traditional domain name trading market, 120,000 can already buy a good Shuangpin or four initials .com domain name in China. The auction of Amazon.eth undoubtedly confirmed that The power of NFT in the field of domain names.
In March 2020, the encrypted art trading platform AsyncArt and 13 encrypted artists jointly launched an NFT painting "First Supper". The feature of this painting is that it can be programmed. The painting is divided into two concepts: Master (main canvas) and Layer (layer). Master is the main form of the painting, which is composed of multiple layers.
There are 22 Layers in "First Supper", and each Layer is an independent NFT. The Layer owner can change the display method of the Layer, so that the Master has 31.3 billion different display forms.
The final bidding price of "First Supper" is 103.4 ETH. This deed is widely circulated in the NFT market, especially in the encrypted art circle, and is known as a milestone work of programmable encrypted art.
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2. Mainstream auction methods in the NFT market
The auction of NFT is still in the early stage. The auction venues are mostly on trading platforms such as OpenSea and AsyncArt. The auction method is also the same as the traditional auction. There are mainly three types of auctions: Buyout Price, English Auction, and Dutch Auction.
One-off price sale: direct price sale, for example, the seller directly prices a certain NFT at 1 ETH, and the buyer pays for the purchase. In theory, this method does not belong to the category of auction, but is equivalent to one-to-one commodity sales.
English-style auction: Price-increasing auction, the most common auction method, sets the starting price and auction time, and bids through users, and the highest final price wins.
Dutch Auction: A reduced-price auction in which the starting price, ending price and auction time are set, and the starting price is higher than the ending price. As time goes by, the price will gradually drop from the starting price to the ending price until a buyer buys it.
However, this is both an advantage and a disadvantage. Traditional gameplay limits NFT’s access to a broader market.
The existing gameplay is not very attractive to ordinary players. After all, most people cannot accurately evaluate the value of encrypted artwork or other NFTs. These auctions can only be aimed at those who have a certain artistic aesthetic level and have a strong interest in NFTs. A very small group of interests.
To expand the audience of NFT auctions, other ways should be adopted to empower them. DeFi+NFT is one of the most popular solutions at present. Combining DeFi's gameplay with NFT's attributes as value binding, and integrating DeFi's financial inclusion thinking can make NFT auctions more interesting and at the same time make all players profitable. Figure, this is exactly what the DEGO NFT auction is doing.
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3. Interpretation of GEGO Auction
GEGO is the collective name for NFT in the DEGO system. Each GEGO is minted from DEGO tokens, and the amount of DEGO spent when minting is the face value of GEGO. GEGO also supports the reverse destruction operation, and the number of DEGO tokens corresponding to the face value can be returned after destruction.
Of course, GEGO is not just a collection of DEGO tokens, it also has some added value. GEGO has 6 qualities (grades), and each DEGO has different attribute bonuses. Depending on these attributes, GEGO can be used for pledge mining or to obtain dividends.
The items in the GEGO auction are cast by the system. The DEGO required for casting comes from a 2% transfer fee. Half of the transfer fee is directly destroyed for deflation, and 40% of the remaining half is used to cast GEGO items.
GEGO Auction Rules
The GEGO auction is similar to the English auction, that is, the price-increasing auction, the highest bidder wins, and the FOMO3D element is added to the rules. The specific rules are as follows:
GEGO auctions use ETH to participate in the auction, and the starting price is 1 ETH;
After each successful bid, the price will automatically rise by 10%. The new bidder will return the ETH principal of the previous bidder if the bid is successful. Of the 10% price difference, 20% will be owned by the previous bidder, and 80% will be the income of the auction system ;
The initial countdown of the GEGO auction is 24 hours, and the countdown is increased by 10 minutes for each successful bid, and the maximum countdown is 24 hours. When the countdown is less than 1 hour, the maximum value of the countdown is changed to 1 hour;
After the countdown ends, the last successful bidder (the highest bidder) will get GEGO;
Of the income from the auction system, 5% will be used as the GEGO fund, and 95% will be injected into the dividend pool.
Highlights of the GEGO Auction
1. Use FOMO sentiment to push up the auction price.
GEGO auction itself has a profit-making effect, and all participants want to get a share of it. When the price is low (especially when it is lower than the face value), the players’ bidding is more rational, but when the price soars, the players are often affected by FOMO Emotional contagion, combined to push up prices.
The FOMO of players is the greatest affirmation of a project. If the final bidding price of this GEGO auction falls near its face value (35 ETH), then the effect of this auction and even the entire model of GEGO will fail. In the end, the auction result, which was nearly 4 times the face value, confirmed the success of this game.
2. Make money by bidding, and the participants collectively profit
The biggest difference between GEGO auctions and English auctions is that there is no centralized seller. The GEGO participating in the auction is cast by the system, and the income generated during the entire auction process does not need to be paid to a certain seller, which makes the funds highly flexible and makes it possible for all participants to make profits.
According to the rules of the GEGO auction, except for the last bidder during the auction, other players participating in the auction can get 2% of the principal in ETH. It is a great temptation for players in the currency circle.
With the evolution of DEGO, these "cards" may expand to more value in the future, players who are not photographed will profit, and players who are photographed will be happy.
3. GEGO itself has rich value attributes
According to the application scenarios of GEGO, we can divide the value attributes of GEGO into three levels.
Cultural value: The body of "Sotoshi Nakamoto" in this auction is a painting, which belongs to the field of encrypted art, and has its own cultural and artistic value. The two Titles of "The First GEGO for Auction" and "Satoshi Nakamoto" That's enough to get people in the industry excited. It is an exaggeration to say that the status of this painting in the GEGO system and even the entire encrypted art market is equivalent to that of Satoshi Nakamoto in the blockchain world.
Today's works of art and collectibles, whether in the real world or in the encrypted world, often highlight this level of cultural value, or "the power of faith." Stamps worth 8 cents can sell for 100 yuan or more. A simple painting can sell for 1 ETH or even 100 ETH. Of course, relying on this alone is far from enough to support GEGO’s selling price of 129 ETH. If there are no other value attributes below, then this 129 ETH is a bubble, and the GEGO auction will become an NFT fund.
Token value: "Sotoshi Nakamoto" is minted from 10,000 DEGO, and if it is destroyed, the corresponding amount of DEGO will be returned. This also means that it has a gold content of 35 ETH. If the price of DEGO rises in the future, its gold content will also rise accordingly.
4. GEGO auction provides a source of funds for the dividend pool
In GEGO’s auction rules, 80% of the 10% price difference income will be used as auction system income, and 95% of the auction system income will be injected into the dividend pool for dividends to DEGO or GEGO holders.
By querying the data of the dividend pool address, this auction alone contributed more than 103.5 ETH to the dividend pool.
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DEGO dividend pool data (data source: Etherscan.io)
Let’s take a brief look at the overall logic of the GEGO system. The casting of the items in the GEGO auction comes from the transfer fees contributed by the players. Part of the income during the auction process is directly distributed to the bidders, and part of the dividends to the players. The players who win the bid can finally get the rewards GEGO's three-in-one value attribute.
Four. Summary
It can be seen that from the casting of GEGO to the auction to the use, the whole system has created a closed loop of value, and any participant is both a contributor and a beneficiary. This is not only decentralized finance, but also inclusive finance.
