The basis for this proposal is the current GA contract.
Modifications to make:
a) there is a linear declining function that defines the maximum price a bidder can bid. If a bidder can successfully submit such an order they are guaranteed to receive the to be sold tokens as bidders after them can not outbid them anymore.
b) Solvers are given permission to close an auction slightly earlier. If they can place a bid that is e.g. less than 0.3% below the current “max price” that would close the auction - the auction is closed immediately and thus an atomic payout of the sell tokens is possible.
The closing of an auction will often create arbitrage opportunities. If this arbitrage opportunity is open for anyone most of the value that arises from the arb. opportunity will turn into MEV. In the modification, the arb opportunity should be almost completely captured by the solver. To make this profitable even for the seller the solver will need to commit to giving most of the arb opportunity to the seller. This can be achieved by giving the GA of a “protected order” in GP (an order that needs to receive the fair clearing price)
Modification a) allows that bidders can already take out sell tokens - this is useful for very large orders. They could already claim an amount of sell token once they bid. We could allow them to claim later more once the clearing price is reached. However - it is not clear whether the additional gas costs are worth this benefit.
- don’t allow early withdrawal
- allow early withdrawal but this would give up claim on the clearing price
- allow early withdrawal + allow withdrawal at the clearing price.