III.II.VI Dutch Auction

Dutch Auction for POWER tokens.

Once the Transfer Epoch has begun the Dutch auction will begin simultaneously if any POWER holder failed to participate. The price per basis point (0.01%) of POWER token, calculated as a percentage of the total POWER supply, in the Dutch auction will start at $2^{99}$ wei (the smallest unit of WETH) and decrement the exponent approximately every 3.6 hours. During the period between exponent decreases the price linearly declines. This means that after the first 3.6 hours of the auction the price will be $2^{98}$ wei and linearly decrease to $2^{97}$ wei over the following 3.6 hours.

In the implementation, bitwise shifting is used to achieve this effect. That is to say that at the midpoint between two exponents, the value is halfway between them. In order to purchase POWER in the Dutch auction, purchasers must call the Buy method.

The diagrams below illustrate the intended price curve of the Dutch auction in ETH over the 15 day period. The first demonstrates the entire price curve, while the second shows a smaller slice of the curve to demonstrate its semi-linearity.

The price of 1 basis point of POWER in ETH at each 3.6-hour period (shown in days).

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A “slice” of the price curve between periods 40 and 50.