Bounce Finance is a cross-chain decentralized auction protocol. The native Bounce token, also known as the AUCTION token, is at the heart of the Bounce Finance crypto ecosystem. Holders can use the token for protocol governance and operational costs throughout the protocol. Decentralized auction platforms provide a way for large volumes of bidders to participate in trustless auctions. Furthermore, Bounce offers a diverse range of products and tools for creating customizable auctions for numerous applications.
In this article, we’re going to dive deep into the Bounce Finance crypto ecosystem. Plus, we’ll explore the Bounce token, the Fangible NFT marketplace, and the various types of decentralized auction protocols Bounce has to offer.
To participate in decentralized auctions on the Bounce platform, you’ll need to connect using a crypto wallet such as MetaMask. Check out the DeFi 101 course at Moralis Academy to learn how to safely install and use MetaMask with some of the most prominent DeFi protocols!
What is Bounce Finance?
Bounce Finance is a cross-chain decentralized auction protocol. Bounce offers a broad range of auction services that enable users to create, network, trade, and collect various digital assets, including fungible tokens and non-fungible tokens (NFTs). Users can swap and trade rare digital assets using a range of trustless auction formats and competitive swap environments.
Auction types include fixed swap, sealed-bid, Dutch and English auctions. Bounce also incorporates elements of decentralized finance (DeFi) such as staking mechanisms and liquidity mining. Plus, users can trade assets via the NFT marketplace and benefit from private and public over-the-counter (OTC) trading with automatic execution. Furthermore, holders of the Bounce token (AUCTION) can take part in on-chain governance to submit and vote on proposals to make changes to the decentralized auction protocol.
One of the guiding principles of Bounce is that scarce resources create a “competitive swap environment”. In contrast to the “infinite liquidity” of decentralized exchanges (DEXs) like Uniswap, Bounce aims to gamify token swaps, making the process intentionally competitive by limiting the supply of assets and facilitating bidding wars via auctions. Also, the Bounce web app supports multiple wallets on both Ethereum and Binance Smart Chain (BSC), including MetaMask, Coinbase Wallet, Ledger, and Trezor.
The AUCTION Token
The Bounce token, also known as the AUCTION token, is the native utility token of the Bounce Finance crypto ecosystem. It is essential for the operation of the decentralized auction protocol platform and is essential for protocol governance. One AUCTION token equates to a single vote for governance proposals. This means that holding more AUCTION tokens entitles participants to more votes and, therefore, more influence on decision making. The AUCTION token also facilitates “utility capture and value realization” while incorporating game theory and economic incentives to increase adoption and platform utility.
Furthermore, pool creators use the AUCTION token as a medium of exchange when setting up auctions. Plus, users receive auction proceeds in the AUCTION token. Another valuable attribute of the AUCTION token is that it provides access to advanced auction types with exclusive pools and reduced token prices. Also, holders of the AUCTION token can create “social verified pools” that help minimize scams and fake pools.
At the time of writing, the AUCTION token is trading at around $40 with a market cap of $295 million, according to CoinGecko. Initially, the AUCTION token will follow an inflationary economic model to incentivize platform adoption. However, as the platform grows, it will transition to a non-deflationary model before becoming deflationary as platform governance is fully established.
Users of the platform can also make cross-chain Bounce token swaps via the withdrawal page of the Bounce app. Bounce makes it simple to convert between Ethereum ERC-20 and Binance Smart Chain (BSC) BEP-20 token standards for an equal amount of tokens. Also, users can toggle between Ethereum and BSC versions of the platform.
Bounce Finance Crypto Auctions
The Bounce Finance decentralized auction protocol provides various ways of participating in decentralized auctions. Below we discuss some of the core Bounce Finance crypto auction types on offer and the key differences between them.
Fangible
Fangible is a non-fungible token (NFT) marketplace that features rare artwork from some of the biggest stars. Powered by Binance Smart Chain (BSC), Fangible connects artists with fans. Fans can access Fangible NFTs to enjoy a “new kind of fan experience” and participate in the creator economy. The mission of Fangible is to bridge the gap between blockchain-based digital currencies and contemporary entertainment mediums.
The Fangible team commits itself to creating an “experience-driven NFT platform” that changes how we share digital goods. Also, the project focuses on making the creator journey simple and removing barriers to entry by eliminating high transaction fees and offering multi-chain support.
Fangible is one of the first chain-agnostic NFT marketplaces. The platform allows creators and fans to create NFT collections to showcase and trade throughout the community. Also, Fangible is developing tools that will enable advanced trading features and integrated marketplaces.
Bounce Polkadot
Bounce provides innovative decentralized crowdloans via the Polkadot ecosystem. Participants can pledge Polkadot parachain bonds for DOT lending, enabling users to earn two streams of passive income. Plus, users can access crowdloan rewards in tandem with staking rewards and unlock liquidity options by claiming parachain bonds. Moreover, Bounce Polkadot slot auctions provide a decentralized alternative to traditional crowdfunding models.
Bounce OTC
The Bounce over-the-counter (OTC) trading platform aims to provide attractive prices for token swaps during the bear market. To incentivize this, the OTC platform offers slippage-free trading on any ERC-20 token with zero limits.
Fixed Swap Auctions
In a fixed swap or fixed price auction, auctioneers and bidders agree on a set price. This type of auction is useful when an auctioneer has a target value in mind for the assets on auction. Bounce Finance provides fixed swap auctions for both ERC-20 and BEP-20 tokens. These auctions are time-sensitive and execute automatically. Plus, bidders and auctioneers receive their assets simultaneously.
Sealed-Bid Auctions
In sealed-bid auctions, every bidder submits a concealed bid to the auctioneer ahead of the starting date of the auction. Traditionally, these bids would be physically sealed so that no one can see what the other participants have bid until the start of the auction. Furthermore, all bids are opened at the same time, and bidders only get one chance. This is in contrast to open bids, which allow potential buyers to place multiple bids and compete against other bidders. This model is a popular choice for bidding on government contracts.
Bounce brings sealed-bid auctions onto the blockchain with a twist. The reveal of the winner of Bounce sealed-bid auctions occurs when the pool time ends. This is determined by a smart contract, which “automatically fills up bid orders from highest bid price ratio all the way down until all the tokens in the pool are sold”.
Dutch Auctions
During Bounce Dutch auctions, assets begin with a starting price known as the “ceiling price”. The price of assets drops by a predetermined amount periodically, and the auction comes to an end once all assets have been sold.
Liquidity Lock Auctions
The liquidity lock auctions are essentially a new and improved version of Bounce Finance crypto auctions. When an auction finishes, a locked liquidity pool is created on a decentralized exchange such as Uniswap, SushiSwap, or 1inch Exchange and filled with funds raised during an auction. Then, auctioneers must reach a consensus on the terms of the liquidity provision before the auction begins.
This type of auction boasts numerous advantages over other models. Not only does it minimize the risk of rug pulling by enforcing liquidity provision, but it also saves time and provides a greater degree of protection for investors.
Non-Fungible Token (NFT) Auctions
Bounce non-fungible token (NFT) auctions bear some of the same auction principles as token sale events but with fewer assets available. There are three types of Bounce NFT auctions. These are sealed-bid, English, and Dutch.
Social Verified Auctions
Social verified auction pools aim to minimize illegitimate users or scam pools while preserving the spirit of decentralization. This helps to improve the user experience and quality of auctions that take place on the platform. Social verified pools operate in a similar way to regular Bounce Finance crypto auction pools. However, two main factors set them apart. Firstly, to create a social verified pool, users must complete a project information page to provide public information about the project. A key requirement for pool creators is to provide verifiable on-chain data with public availability for all participants.
Secondly, social verified pools must be verified by the Bounce community before launching. Prospective pools can stay in a pending status for up to 48 hours. During this period, community members stake AUCTION tokens to verify the pool. Once a social pool has 300 AUCTION tokens staked, it will automatically launch. There is no financial incentive for participating in pool verification. However, projects can incentivize community members to support them.
Lottery Auctions
Lottery auctions and NFT lottery auctions allow participants to purchase lottery tickets for a predetermined principal amount set by the creator of the pool. This enters participants into a prize draw scenario. A smart contract then randomly selects the winner of the draw. Once the winner is chosen, the smart contract automatically swaps the principal amount for the auctioned asset. The pool creator then claims the funds raised from the sale. A maximum of 60,000 participants can enter the prize draw. Plus, those who are unsuccessful can reclaim their principal amount from the auction pool.
Bounce Toolbox
Still under development, Bounce Toolbox is a comprehensive suite of developer tools that will facilitate the creation of customizable decentralized auction protocols. Bounce Toolbox comprises user interface (UI) kits, application programming interface (API) access to NFTs, and open-source smart contracts. In turn, these tools will help to bridge the gap between NFTs and decentralized finance (DeFi).
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Decentralized Prediction Markets
Bounce Finance offers a decentralized prediction markets platform that combines tools for creating prediction markets in conjunction with auction models. The Bounce crypto prediction market allows anyone to create decentralized prediction pools or participate in markets created for a simple user experience with “elegant calculations”. Further, the Bounce Finance crypto prediction markets support multiple assets, including Bitcoin (BTC), Ethereum (ETH), Chainlink (LINK), Compound (COMP), Synthetix (SNX), and XRP.
Plus, the Bounce prediction engine favors early bets. Also, pool creators can participate in prediction pools as well as initiate them. To create a prediction pool, there must be three parameters set. These are the period in which bets can be placed, the assets that can be used, and the name of the pool. When the pool launches and the starting price is set, the prediction engine fetches the price using an oracle, enabling users to place bets.
Users pay for these bets using the AUCTION token. Furthermore, users can bet on both sides of the prediction multiple times within the specified window. Once this window closes, the pool enters the “final price query stage” where bets close for two hours while the prediction engine establishes the average price and sets the final price. Then, smart contracts deliver the outcome after comparing start prices with end prices.
Winners share the prize pool of AUCTION tokens based on their proportional stake and the timing of their bet. The earlier the bet, the more favorable the reward calculation. If there are no bidders on the losing side, all bidders reclaim their principal. However, if every bidder loses, all tokens are burned.
Auctions Search Engine
The initial iteration of the Bounce decentralized auction protocol worked in a similar way to eBay. However, Bounce V2 aims to become “the Google of decentralized auctions” by offering an auction browser via a front-page search bar instead of an open list. Users can search by token name, auction type, and pool information. This new search feature makes for smooth platform navigation while reducing the potential for scam projects to thrive.
What is Bounce Finance and the Bounce Token? Summary
With a broad range of auction types available, Bounce Finance is a diverse, permissionless decentralized auction protocol with highly customizable parameters. Also, the platform provides a competitive swap environment that adds an element of gamification to the auction process while minimizing scams and rug pulls.
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