This week surplus auctions began and it soon became apparent that keepers are taking advantage of the system in its current form. My hypothesis is that the 3% minimum bid increase creates an opportunity for keepers to price out other keepers from bidding as long as they are the first to bid and stay 3% away from the current spot price.
You’ll see here that all of the auctions except the first have one bidder and they stood to profit just under 3%, making it impossible for another keeper to outbid.
One question we can ask is, is 3% a reasonable take rate for keepers or should it be as tight as possible? As a MKR holder I would like to see this value optimized as best as possible for MKR burn.
My signal request therefore becomes: Should we reduce the minimum bid increase required for Surplus Auctions (FLAPs), and if so, what should the value be?
- 3% (Current)