You are on the Opensea community driven information site. Official site – opensea.io
The platform provides several purchasing options:
- At a set price
- English auction
- Dutch auction
With the first option everything is very clear, but auctions are held according to different rules.
English auction
This is one of the most common and familiar types of auctions. Principles of its operation:
- Starting Bid Price: The auction begins with a low or zero bid for the item or lot being sold.
- Increasing bids: Buyers place bids by offering the value they are willing to pay for an item. Bids are usually increased by a certain amount, which is called the “auction step” or “bid increment.”
- Buyers compete: Once a buyer bids, another bidder can bid higher. This process continues until there are no participants left willing to place higher bids.
- Auction End: The auction ends when no bidder is willing to place a higher bid. The person who placed the last and highest bid wins the right to buy the item at that price.
- Payment and transfer of goods: the auction winner undertakes to buy the goods at the last bid made by him. Payment is made according to the terms of the auction. After payment, the winner receives the goods.
English auctions can be quite dynamic and exciting, as participants can compete with each other for the right to buy an item. This type of auction is especially suitable for goods that can change their price quickly depending on supply and demand.
When using an English auction on the OpenSea platform, it is possible to set a minimum price (reserve) for the lot. If at the end of the auction the price does not reach this reserve amount, the auction will end without a sale. The seller has the right to choose any amount as a reserve. If it is higher than 1ETH, then OpenSea takes on the payment of the gas commission, and if it is lower, then the commission is paid by the seller himself.
Once the auction has started, the reserve price cannot be changed. But the seller will be able to accept bids and stop trading at any time during the auction, even if the bid is below the reserve value. But he will need to pay a gas fee.
Dutch auction
In this auction, the price starts at a high value, gradually decreasing until the participant buys the item at the current price. This type of auction is named after the Netherlands, where it was first used for selling flowers in retail spaces.
The operating principle of the Dutch auction:
Starting price: the auction starts with a high bid, which gradually decreases. The original price is set by the seller or auctioneer.
Price reduction: The price is reduced by a certain amount, called the “auction step”. This step can be predetermined or changed during the auction process.
Participants decide: buyers decide for themselves when to buy the product and at what rate. At the moment when the price drops to the amount that the buyer considers appropriate, he can confirm his readiness to buy.
Biding to end: The auction continues until all items have been sold or the minimum selling price limit has been reached.
Dynamic: Dutch auctions are usually quite fast. Prices drop in real time, forcing buyers to make decisions quickly.
This type of auction can be an effective selling method, as it allows you to quickly find the best prices available to buyers. In addition, such auctions can create a sense of competition and promote quick sales.
Selling your NFT in this way may carry certain risks, since there is a possibility of receiving an amount for it that is lower than the one initially set at the auction. It might be wise to start with a higher price for the NFT you are selling than you the seller would like to receive.
How to participate in an auction as a buyer
Weth tokens are used to make payments, and it is better for the buyer to purchase them in advance. Participation in OpenSea auctions occurs as follows:
- In the filter panel on the left, find and select the “On Auction” option.
- Select an interesting lot in the list and click on it.
- Read the description, bids, price changes and click on “Place Bid.”
- Accept the terms, indicate your proposed amount and click on “Place Bid” again. If there are no WETH tokens in the buyer’s wallet, use the “Convert ETH” option. ETH cryptocurrency will be exchanged for WETH directly on the platform.
After placing a bet, its amount will be fixed. If no one exceeds it by the end of the auction, the funds will be transferred to the seller, and the NFT will be transferred to the buyer. If the bid is outbid, the money will be unfrozen and will become available for transactions.
For sellers
According to the provisions of OpenSea, the process of creating and placing tokens through Collection Manager is carried out without additional charge. This is driven by the platform's desire to enrich its collection with a variety of items and simplify the process for digital artists. Until the first NFT transaction or sale occurs, the information will not be recorded on the blockchain and therefore no payment will be required.
However, your first listing may require a fee due to the activation of a new account.
A percentage of 2.5% is withheld from the buyer directly during the sale and serves as a reward for the platform for its services.
In fact, all stages from the creation of a token to its sale and receipt of income do not require financial investments, which opens up broad prospects for beginners and earning money from scratch.