The Gravity Bridge mission of decentralized and community owned and driven infrastructure continues with the deployment of the Gravity Auction Module. Developed by Chandra Station and developers from Althea Networks, the Auction Module enables $GRAV token holders to participate in auctions for a diverse range of Cosmos tokens. The tokens up for auction come from the bridge fees paid by users of the Gravity Bridge, which connects the Cosmos and Ethereum ecosystems.
In addition to fair and permissionless token distribution, the Gravity Auction Module provides a number of other novel functionalities.
Background on Bridge Fees
Gravity Bridge fees are set by community governance and as of this writing consist of one basis point (Tx Value * 0.0001) on all MsgSendToEth transactions. That is to say, when a user bridges a token from the Cosmos ecosystem to the Ethereum ecosystem, a bridging fee is paid by the user in exchange for using Gravity Bridge.
Bridge fees are paid in the same denomination as the token being bridged. For example, if a user is bridging 10,000 USDC (from their Gravity wallet to their Ethereum wallet), the fee collected by the bridge would be 1 USDC.
Note: In addition to the bridge fee, gas fees are also paid. Gravity Bridge uses an efficient batching system to minimize gas fees for the user. The higher the traffic on the bridge, the lower the amount of gas paid individually and the faster the transactions are processed. Unlike bridge fees, gas fees are paid to relayers.
How are bridge fees managed?
Bridge fee usage and fee allocation is another variable managed via community governance.
Currently all bridge fees are split equally between Gravity Bridge stakers (50%) and the Gravity Bridge community pool (50%). All bridge fees collected in the community pool are made available to the public via the auction module.
Because Gravity Bridge collects fees in the same denomination as the token being bridged, a wide variety of different tokens accumulate in the community pool. Users may then examine the auction module and bid on those tokens using $GRAV. There is a nominal bid fee of 50 $GRAV for each bid.
Winning bids will see the tokens they bid on deposited in their Gravity Bridge wallet, while losing bids will see the $GRAV they bid returned to their wallet (minus any bid fees paid while bidding). At present, winning and losing bids, returned or rewarded tokens, will not appear in a block explorer. To see if you have won the auction, you can check your account balances before and after the auction completes.
Auction Module Advantages
The auction module offers a number of unique features and advantages, not only for bidders, but for Gravity Bridge as well.
Permissionless
The auction module provides a permissionless, decentralized distribution system for collected bridge fee tokens and encourages user engagement with Gravity Bridge. It furthers the utility of the Gravity Bridge token, which is used to make bids and pay bid fees. There are no barriers to participation, anyone with $GRAV may use the auction module.
Efficiency through simplicity
Just as Gravity Bridge operations become more efficient (both in speed and lower cost) with increased traffic, with sufficient participation the auction module begins to offer additional advantages, such as the potential to serve as a price oracle, enabling a greater diversity and more dynamic fee structures for Gravity Bridge.
The Auction Module implements a bid transaction type that records the highest bidder for each lot of tokens being auctioned. At the conclusion of each auction, the tokens are transferred to the highest bidder, ensuring a fair and transparent distribution process. This streamlined approach minimizes friction and maximizes efficiency, allowing participants to focus on engaging with the Gravity ecosystem.
Community Driven
The auction module came from the community, developed and maintained by Chandra Station, a Gravity Bridge validator and community member. The various parameters of the module, for example bridge fees, auction intervals, token distribution are all managed through community governance, enabling the community to further refine, manage, and improve the module.
In this initial phase of the module, parameters are set universally for bridge fees of all token denominations. In the future, the community might select specific tokens that go entirely to the community pool/auction module, while others can be set aside to continue their shared distribution between the pool and individual stakers. The advantage of this is that less common tokens or those with very little volume, do not produce sufficient fees to be of much use for individual stakers. Such tokens would do better as an auctionable lot available to bidders, rather than distributed to stakers as dust, where it might collect proverbial dust. By contrast, high volume tokens such as USDC provide sufficient fees that a 50/50 distribution adds value both to the auction module and individual stakers who receive it.
How to participate in Gravity Bridge token auctions via the Auction Module
Step 1: Acquire GRAVITON Tokens
To start bidding in the auction app, you will need to have GRAVITON tokens ($GRAV). All bidding and related fees are paid using $GRAV. You can acquire the Gravity Bridge coin from various exchanges, including Osmosis DEX and Kujira. Please note that you will need to withdraw your $GRAV to your Gravity Bridge wallet after acquiring $GRAV tokens.
Step 2: Understand Bid Fees
The auction module features a fee system to deter sandbaggers, bots, and auction snipers. Each bid incurs a bid fee, which is currently set at 50 GRAV tokens.
Step 3: Connect Your Wallet
Before participating in auctions, ensure your wallet is connected to the Auction Module App. This will enable you to manage your bids and receive any tokens you win.
Step 4: Select Auction and Enter Bidding Amount
With $GRAV in your Gravity Bridge wallet, choose the auction you want to participate in, then enter the amount you wish to bid. Remember to monitor competing bids.
Note: Currently the amount you enter is the amount that you will bid. Assuming you bid higher than the current bid, what you enter will become the new highest bid. For example, if the current bid is 1000 $GRAV and you bid 3000 $GRAV, the new highest bid on that auction will be 3000 $GRAV.
Step 5: Sign the Transaction
After entering your bid amount, you will need to sign the transaction to confirm your bid. Make sure to complete this step promptly to secure your bid.
Step 6: Wait for Auction Outcome
After placing your bid, monitor the auction to see if you're outbid. If you are outbid, the GRAVITON tokens will be returned to your wallet when the auction concludes.
Step 7: Keep Track of Auction Releases
Auctions are released in batches every 85,000 blocks (roughly every seven days). Each auction has a unique identifier and features a single token.
After the auction concludes, check your Gravity Wallet balance to see if you have won the tokens you bid on or if the $GRAV you bid has been returned.
Join Us in Shaping the Future of Gravity Bridge
The Gravity Bridge Auction Module represents a significant milestone in our journey towards empowering community engagement and value distribution. We invite you to join us in shaping the future of the Gravity ecosystem. Together, we can build a more inclusive, transparent, and resilient decentralized finance landscape.
Stay tuned for further updates and announcements as we continue to innovate and evolve. Together, we can reach new heights with Gravity.