Explaining the $BOSON community token distribution mechanic
By: Boson Protocol
Tags: Crypto, Ido, Web3, Token, Dcommerce

Overview

The $BOSON token is the core economic unit of the Boson ecosystem. Growth in the value of the network is driven by establishing an economic flywheel, following the dCommerce sustainability loop.

On April 7th, we will begin our community token distribution. In this distribution we will make 6 million $BOSON tokens available for sale, which will become immediately available for use by our token holders at the conclusion of the sale process.

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EDIT: THE AUCTION IS HAPPENING HERE.

Start date/time: April 7th, 2021, 7:00am UTC

End date/time: April 9th, 2021, 8:00am UTC (49 hrs total) .

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To access our Public Sale page visit:

www.bosonprotocol.io/publicsale

Sale format: Batch auction

We will be using the newly announced Gnosis Auction Initial Decentralized Offering (IDO) which provides a fair, transparent way for the community to acquire $BOSON tokens.

The sale will last for a set period of time, where anyone will be able to bid to buy BOSON tokens for a minimum of 0.75 USD.

Important: Any bid to buy tokens at this price or above will be collected and stored until the end of the sale process.

When the auction is complete there will be a master contract finalization. The smart contract ranks the bids in price order and selects the group of bids that together represent the sale of tokens for the highest price. All bidders pay the lowest price of all qualifying bids. Tokens will then be claimed by the winning bidders via a ‘reclaim’ function that the users must use.

The diagram below sets out the approach:

In the diagram above, every orange bids get filled at the price of the lowest accepted bid (Final Price)

The auctioneer starts by gathering all the bids and sorting them out according to price. The auctioneer works back from the highest bid until all the shares are sold. The final price that fills the quota of shares to sell becomes the offering price to all successful bidders.

This type of sale is known as a “batch auction” and is extensively used in traditional financial markets as a means of determining a fair price of an asset, for instance during an IPO.

All buyers pay the same price, and at least in a rational sense, should be happy whatever the outcome, either they purchase the tokens at or below the price they believe ‘fair’, or they do not participate in the sale.

Gnosis Auction User Flow

In Gnosis Auction, there are two types of participants: one seller and multiple bidders (also EOAs or SCs).

1. The seller sets four parameters:

Sell token and bid token

Amount of tokens to sell

Minimum price willing to accept (ask price)

Auction duration (preset)

2. Once the auctions starts, the bidders get to start placing bids by setting the following parameters and submitting a transaction:

Approved token (if first time)

Select amount of bid tokens willing to commit to the auction

Select maximum price willing to pay

After submitting the transaction, the bidder’s bid will be valid, and the amount of bid tokens that she selected would be subtracted from her balance.

3. Once the auction concludes, the auctioneer submits a transaction which will calculate the closing price. Closing price is calculated using the following method:

3.1 Bids are gathered by the smart contract and sorted from highest to lowest price

3.2 The smart contract works back from the highest bid, adding each bid’s amount of tokens to buy, until the original amount to sell is reached

3.3 The bid that adds up the amount of tokens to sell is selected as the final closing for all participants.

3.4 Participants that selected a maximum price at the final closing price or higher receive tokens, the ones that had selected a maximum price below the closing price are left out.

4. After the price has settled, the auctioneer will receive the proceeds of the auction, and the bidder will need to submit an additional transaction to claim the tokens bought (or the tokens used to bid with, in case the bid didn’t get filled).

Why a batch auction?

Gnosis Auction is a platform enabling fair price discovery for token distributions. The aim is to make it easy to discover a fair price for their token through the format of a batch auction.

The auction will run for a fixed period of time, and all bids will be evaluated.

There is no first-come-first-serve race , and all participants have an equal chance to acquire tokens, based on their bidding price.

, and all participants have an equal chance to acquire tokens, based on their bidding price. Any participant can select the price at which they are happy to buy BOSON tokens at any time without time pressure

We have selected this mechanic as it is a fair system to enable community distribution, where an easy interface is provided for price discovery.

Gnosis Auction enables:

a) Token issuers to determine a minimum price they are willing to sell their tokens for (ours starts at $0.75 USD), and

b) Bidders to set the maximum price they are willing to pay in the form of limit orders.

The group of highest offering bidders that together will buy 6 million tokens all will pay one clearing price, which is the lowest price qualifying bid.

The starting price of the auction is $0.75, and if all 6 million tokens offered are sold at that price, the Boson Protocol project will raise a further $4.5m USD. Any unsold tokens will be returned to the Foundation ecosystem development fund for future use.

What makes this mechanic fair?

We are committed to the idea of capture resistance for commerce, that decentralized software can enable communities to work together to secure the outcome that is best for the greatest number of participants.

In this form of token offering, we are asking the community to set the price of the $BOSON token, based on the collected desire to own the asset, and be part of the ecosystem as it grows.

Our aim is to avoid an exclusionary process, where only a limited number of people can participate, either by a lottery, or by first-come-first-served mechanics.

Instead, we are creating a set time period, where anyone can bid to acquire $BOSON tokens, at a price that is acceptable to them.

Frequently Asked Questions?

Is there a minimum and maximum bid?

There are no minimum or maximum bids. The minimum bid value is $0.75 USD per token. Any buyer can offer to buy any amount of $BOSON tokens for the price they believe to be acceptable.

Why do you believe this sale format is fair?

This sale format enables all participants to purchase $BOSON tokens at or below the price they believe to be appropriate. Either they receive tokens at the ‘fair’ price, or they receive their bid back. From a rational standpoint, participants should be equally happy with either outcome.

What price will I pay if I make a bid?

As a bidder, you have to decide on and then input two variables;

The maximum price that you are prepared to commit to per $BOSON token. The total amount (in USDT) you wish to commit to for the purchase of $BOSON tokens.

You will never pay more than either of these amounts but you may receive a lower token price than your maximum bid. You will pay the lowest qualifying price that anyone pays. All successful bidders in the public sale will pay the same price.

Here are some examples:

Example 1: Perfect Match

100 tokens are for sale

Bidder 1: $39 total amount and a token maximum bid per token of $0.75

Bidder 2: $15 total amount and token maximum bid per token of $0.8

Bidder 3: $21 total amount and token maximum bid per token of $0.95

Result: 100 tokens sold at $0.75.

Bidder 1 gets 52 tokens.

Bidder 2 gets 20 tokens.

Bidder 3 gets 28 tokens.

Example 2: Over Demand

100 tokens are for sale

Bidder 1: $75 total amount and a token maximum bid per token of $0.75

Bidder 2: $80 total amount and a token maximum bid per token of $0.8

Bidder 3: $50 total amount and a token maximum bid per token of $0.9

Result: 100 tokens sold at $0.8

Bidder 1 gets 75 USDT refunded as the bid was too low

Bidder 2 gets 37.5 tokens and $50

Bidder 3 gets 62.5 tokens

Example 3: Whale Purchase

100,000 tokens are for sale

Bidder 1: $80,000 total amount and a token maximum bid per token of $0.8

Bidder 2: $45,000 total amount and a token maximum bid per token of $0.9

Bidder 3: $2,400 total amount and a token maximum bid per token of $1.2

Result: 100,000 tokens sold at $0.8.

Bidder 1 receives 40,750 tokens (and 47,400 USDT refunded).

Bidder 2 receives 56,250 tokens.

Bidder 3 receives 3,000 tokens.

What happens if I make an unsuccessful bid?

All bids are maintained in the auction contract for the duration of the sale. At the end of the sale if you have not been successful, your original bid amount can be withdrawn from the auction contract.

How can the auction be manipulated?

The principal means of manipulating the auction is to make very high bids and then cancel them late on in the auction process. The high apparent clearing price will discourage other bidders, then the cancellation will reduce the clearing price, allowing conspirators to secure a lower price than they otherwise would have paid.

This risk is mitigated by the ability to cancel bids being curtailed after a period of time in the auction, and by requiring bidders to commit funds to the auction smart contract before their bid is valid.

Will the auction be dominated by whales?

We believe this approach is more whale-proof than other sale formats, as all bids are transparent. All a bidder needs to do to buy tokens ahead of a whale, is to be prepared to pay 0.01 USD more per token than that whale, and their tokens will be assigned to them ahead of the large purchaser.

Does it matter if I complete KYC twice?

No, it does not matter how many times you complete KYC, there is no limitation on the number of bids you make or from the number of wallets you do it from. The auction mechanic only requires whitelisted bids to be in the set of highest price bids in order for them to earn tokens.

I have whitelisted an exchange wallet, can I participate?

No, you must whitelist a wallet you are able to interact with smart contracts with, via Metamask or similar tool. If you have whitelisted an exchange wallet you will need to re-authorise a new wallet by passing KYC a second time

What are the risks?

With any cryptocurrency related activity you should be aware you are dealing with highly volatile assets. Only spend what you can afford to lose. Similarly there are inherent risks associated with interacting with smart contracts that you should feel comfortable about before participating. For a full list of terms and conditions, please refer to our terms and conditions page

About Gnosis Auction

Gnosis Auction is a protocol that enables anyone to auction-off assets with fair pricing. They provide the most fair mechanism to launch assets on ethereum:

Front running resistant: Gnosis Auctions prevents front running bots from extracting value by getting tokens early and then dumping them shortly after at a higher price.

User friendly bidding experience: In contrast with other mechanisms, Gnosis Auctions enables bidders to bid at their leisure without needing to time their activity in order to get the desired price.

Full control over participation price: One of Gnosis Auction advantages is the user’s ability to limit the price / valuation at which she is willing to participate. In contrast, IBCO requires the bidder to commit to participation without knowing the eventual price / valuation of participation.

Fair pricing: All bidders will participate with the same uniform clearing price which will be determined when that auction concludes. No one gets the advantage of participating at a lower price compared to other participants.

Step By Step Instructions for participating in the Boson Protocol Community Distribution via Gnosis Auction

Connect Wallet

First, you need to connect your wallet to the platform. On the top right corner, you can find the button that will allow you to connect your wallet to the Gnosis Auction dapp.

2. A popup will appear where you will be prompted a list of available wallets that you can connect to the dapp. Select the wallet type you would like to connect to the Gnosis Auction dapp.

3. After selecting the wallet, in this case Metamask, a Connect Request will appear. In the case of Metamask, you would need to pick what account (Address) you would like to connect with, and click “Next”.

4. Once you have selected the account you want to use, click “Connect”.

Selecting Auctions

5. After all these steps, you have now successfully connected to the Gnosis Auction dapp. From the UI you will be able to differentiate between two sections. The top section of the UI shows the highlighted Auctions that are taking place, while the bottom section of the UI will show us the full list of Auctions that are taking place or have taken place in the platform.

If you want to participate in one auction that is in the highlighted section, you just have to click anywhere in the box and you will be redirected to the auction.

If you want to participate in one auction, that is the all auction section, you have to click in the “view” button and you will be redirected to the auction.

6. If you want to participate in an auction, either select one auction from the highlighted auctions section or select one auction from the dropdown list. In this case, you have selected an auction from the highlighted auction section.

Bidding in an Auction

7. After you have decided the auction you want to participate in, and click on it, you are redirected to the screen below (Keep in mind that the data shown in the below picture will vary for each auction, as all the auctions taking place are independent of each other). The UI can be dissected in two parts, the left side and the right side:

On the left side you have data about the ongoing auction, as well as the price graph.

On the right hand side you can see the parameters you need to fill in to place an order in the auction.

8. In the amount section you would need to input the amount of bidding tokens you are willing to bid in the auction. You can either select the amount you want to bid or directly use the max button to bid all the tokens you have.

9. In the price per bid-token/auction token, the dapp sets by default the price that the auctioneers have set to be the minimum price. From that starting price, you can decide what is the price per bid-token/auction token you are willing to offer.

10. If it is the first time that you have used that token to bid, you will have to approve the contract to spend that token. First click on the “Approve” button, and then confirm the transaction on Metamask, as shown below.

11. After you have set both the amount of tokens to bid, and the price per bid-token/auction token, you no longer see the enter amount section, instead you see a colored bar with the words “Place Order”. Once you are sure about the parameters you have inputted you have to click on “place order” to include your bid in the auction.

12. Once you have clicked on “Place Order”, a confirmation popup will appear that will ask you to confirm the order. As you can see in the image below, the dapp confirmation shows the relevant information of your bid order.

13. After you have clicked on “Confirm Order”, your wallet will trigger a popup for confirming the transaction. In this case, the Metamask popup will appear asking you to confirm the execution of the transaction from your wallet interface.

14. Once the Metamask order has been confirmed, and the transaction has been mined into a block, on the right hand side of the dapp you will see a banner with the price details of your bidding order, and a link to Etherscan so that you can check your transaction details.

Congratulations, you have now learned how to successfully participate as a bidder in a Gnosis Auction.

You can read more about Gnosis Auctions here.

Interested in participating in the sale?

You need to KYC first. Please do so here.

What is Boson Protocol

Boson Protocol is building an open tokenized economy for commerce. It automates digital to physical redemptions using NFTs encoded with game theory. Our core technology disrupts e-commerce platforms by tokenizing real-world products and services and commerce data within a liquid digital market, powered by DeFi infrastructure. We call this decentralized autonomous commerce.

Powerful e-commerce platforms have captured the market. These monopolistic intermediaries extract excess value. They claim to value customer-centricity when what they are really doing is hoarding data and separating people from the value they create.

What is needed is a way to execute commerce transactions trustlessly with minimized human intermediaries or arbitrators. You can read more about our approach in our Light Paper.

The $BOSON Token

The $BOSON token is the core economic unit of the Boson ecosystem. Growth in the value of the token is driven by establishing an economic flywheel, following the dCommerce sustainability loop.

The dCommerce DAO will fund projects that build core Boson Protocol software, applications, tools and integrations, as well as ensuring the growth of the ecosystem via temporary growth policies, such as supply and demand farming.

Revenue generation from projects and initiatives is funnelled back into the DAO, with a fraction of all revenue being used to buy and burn $BOSON. To get the “economic flyweel going part of the “ecosystem rewards’’ fund (see below) is used to fund the dCommerce DAO until it is self sustaining.

The sustainable base funding of the dCommerce DAO is ensured through a minimally extractive fee on transaction coordination and data monetization.

$BOSON token holders will govern the dCommmerce DAO, for more info see our Governance design principles and $BOSON ecosystem value flows articles.

About Boson Protocol

Boson Protocol’s vision is to enable a decentralized commerce ecosystem by funding and enabling the development of a stack of specialist applications to disrupt, demonopolize and democratize commerce.

Keen to learn more? Read our Lightpaper:

https://docsend.com/view/p7g9u8d8wiwnf9jn

In a hurry? Check out our One Pager:

https://assets.website-files.com/5fa40658a63ff659399bba09/60511aa6d05330bf55b03989_160321_Boson_OnePager.pdf

Want to dive deeper? Read our whitepaper.

Lastly, if you’re a decentralization enthusiast, please follow us here, on Medium. We will post frequently about our dCommerce journey and would love to hear your comments!

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