Crypto Batch Auctions: Bulk Trading of Assets

Batch Auctions are a bidding mechanism in which individual orders are grouped together and executed simultaneously.

What are Batch Auctions?

Batch auctions are a bidding mechanism in which individual orders are grouped together and executed at the same time. All orders in one batch will be executed at the same settlement price. Batch auctions benefit from aggregated liquidity and are a popular mechanism for ensuring fair price discovery in both the decentralised and traditional financial world.

In the context of blockchain technology, batch auctions play an important role in initial token offerings, liquidation or redemption of illiquid assets and as a means to prevent MEVs. Batch auctions are less vulnerable to MEVs because the order of transactions within a package does not affect the price.

Traditionally batch auctions work with a single pair of tokens, a separate case is the so-called multi-dimensional batch auction. It allows settlement of bids between several pairs of tokens in a single batch, which can be advantageous for fragmented token pairs (USD-stablecoins) or less liquid token pairs (insurance or market forecasting tokens), as transactions do not necessarily take place between direct counterparties, but can occur in rings.

Felix is currently the leader of the development team for Gnosis, a decentralised trading protocol that creates new market mechanisms for decentralised finance. Felix joined the Ethereum ecosystem in 2018 after working on Facebook’s encrypted messaging infrastructure for 3 years.

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