Long Term Stability: Auctions
Initially, the time period of the Dutch auctions held by the Protocol (i.e. expansions and contractions) will be circadian, occurring every 24 hours and 150 blocks in length. This enables human beings to participate easily but also will result in major market price volatility of FLOAT between expansions/contractions. We plan to double the frequency of the auctions held by the Protocol every two weeks as FLOAT is more widely used and more bots are built to participate in the auctions. We refer to this as the tuning period, where the auction frequency transitions from every 24 hours, to 12 hours, to 6 hours, to 3 hours, to 1.5 hours, to occur every 150 blocks, the length of a standard auction. At the end of the tuning period, the Protocol will no longer hold auctions regularly. Participants will have the option to hold an auction on demand when they deem necessary, for example, there is an arbitrage opportunity due to a difference in the FLOAT market price and target price. Participants who start an on-demand auction will be required to pay the cost of updating the Oracles required for the auction to proceed.