Batch Auction
Fixed-price and continuous bonding-curve launches share one failure mode: the clearing price is discovered after capital has already been committed. That lets fast actors extract value from slower ones through pure ordering — front-running the first block, sniping the first tick, and so on.
A batch auction removes the incentive by collecting all participation over a window, then computing a single allocation and a single implied price simultaneously for every participant, from the aggregate demand observed at the end of the window.
Design Goals
Because this is the only stage at which users commit capital before a liquidity pool exists, the goals are narrower and stricter than a general-purpose AMM's. The mechanism must:
- Settle in a single unit of account regardless of deposit asset.
- Bound the maximum allocation any one address can receive.
- Treat under-subscription as a hard failure, rather than attempt to force a launch.
- Account for every unit of currency and every unit of token individually, with zero tolerance for negative refunds or over-issuance.
How a Round Resolves
| Step | Stage | Reference |
|---|---|---|
| 01 | Parameters fixed at creation, immutable once the auction starts | Funding Parameters |
| 02 | Deposits collected, normalized to USDG, aggregated per address | Chain & USDG |
| 03 | Window closes; single clearing test evaluated once | Clearing Condition |
| 04 | If cleared, effective contributions solved by waterfilling | Waterfilling |
| 05 | Integer residuals resolved by largest remainder | Largest Remainder |
| 06 | Merkle root published; users claim tokens and refunds | Settlement |
What This Mechanism Deliberately Does Not Do
The auction does not attempt to discover a market price. FDV is fixed exogenously by the protocol, and the auction solves purely for a fair allocation of a fixed token pool against demand.
This is a deliberate scope reduction relative to continuous or Dutch-auction bonding mechanisms. The auction subsystem is optimized for distributional fairness and settlement correctness under a fixed valuation — all subsequent price discovery is deferred to the DEX pool created once the round graduates.
Why the cap is load-bearing
The per-address cap is what converts this from a price mechanism into a genuine distribution mechanism. Without it, a fixed-valuation sale is just a first-come queue with extra steps.