23 Jul 2008

I accidentally came across it on the Internet, maybe someone else will be interested...

The Dutch in Europe have always been considered the most cunning traders. Being
once one of the greats sea ​​powers, they brought from their
overseas colonies a bunch of all kinds of exotic junk and sold them on
auctions. But during auctions there is always the possibility that
buyers will collude and buy at a low price. And then the Dutch
came up with a trick. Unlike the traditional system, the owner of the goods
offers it at an initially inflated price, and then gradually reduces it
her, keeping in mind a certain minimum, after which he will simply remove the lot
from auction Whoever shouts first: “I’ll take it!”, is the one who bought it. No one knows,
what price the seller considers minimally acceptable, as well as
what price competitors are willing to buy, so the selling price in Dutch
auction always turned out to be higher than at traditional auctions.

There are no obstacles to organizing such auctions now. By the way, I couldn’t find normal literature on auctions, competitions, tenders. Almost everything that exists is dedicated to the state. procurement

If everything has collapsed and there is nothing to store, remain calm.

23 Jul 2008

Here's what I have on this topic:

REGULATIONS on the procedure for the sale of property **** (lot No. 2) on open tenders in the form of an auction
I. General provisions.
1.1. These Regulations determine the procedure for holding on December 26, 2005. at 13-00 o'clock. open bidding in the form of an auction according to the Dutch system (to increase or decrease the starting price to the cut-off price, but not lower than the cut-off price) with an offer at a price in an open form (hereinafter referred to as the Bidding) for the sale of property **** (lot No. 2) , namely movable property in the amount of 76 items according to the list (hereinafter referred to as the Property), conditions for participation in the auction, procedure for determining the winner.
1.2. The organizer of the auction is the bankruptcy trustee **** Yakimidi L.R.
1.3. The terms, procedure and conditions for the sale of property **** are approved by a meeting of creditors at the proposal of the bankruptcy trustee ****.
1.4. The starting sale price of the Property is determined based on the results of an independent assessment. The cut-off price is determined based on the proposals of applicants for the acquisition of PROPERTY. The size of the bidding step, the size of the deposit, and the size of the fee for participation in the bidding are determined by the bidding organizer.
II. Conditions of participation in the auction.
2.1. Individuals and legal entities (hereinafter referred to as the Applicants), recognized in accordance with the legislation of the Russian Federation as buyers who have the right to purchase the Property, who have submitted an application in a timely manner in accordance with the conditions specified in the notice of auction published in " Rossiyskaya newspaper" dated November 26, 2005 No. 267 (3936). The responsibility to prove his right to participate in the auction lies with the applicant.
2.2. To participate in the auction, applicants submit the following documents to the Organizer of the auction within the period established in the notice of auction (duly certified copies: notarized or by the issuing authority):
- for individuals: passport; tax registration certificate; consent of the spouse to conclude a purchase and sale agreement; payment documents confirming the payment of the deposit and fees for participation in the auction; the representative of the applicant - a duly executed power of attorney;
- for legal entities: constituent documents; certificate of entry into the unified State Register legal entities; tax registration certificate; certificate of the State Statistics Committee of the Russian Federation on the assignment of codes; certificate of state registration; decision of the relevant management body of the applicant authorizing participation in the auction and acquisition of the Property; payment documents confirming the payment of the deposit and fees for participation in the auction; the representative of the applicant - a duly executed power of attorney;
other documents - only in cases expressly provided for by the legislation of the Russian Federation for the acquisition of Property.
2.3. The deposit and fee for participation in the auction are considered received by the auction organizer from the moment they are credited to the account ****.
2.4. The applicant's application is accompanied by an inventory of the submitted documents signed by the applicant in 2 copies, one of which remains with the applicant, the other with the Organizer of the auction.
2.5. The auction organizer does not accept applications with documents attached to them:
- received after the deadline for accepting applications specified in the tender notice;
- filed by a person not authorized to carry out such actions.
2.6. A note indicating the refusal to accept the application, indicating the reason, is made by the Auction Organizer on the list of documents submitted by the applicant, one copy of which remains with the Auction Organizer. The bidder's application and documents not accepted by the Bidding Organizer are returned to the bidder along with a list of documents (with a note indicating refusal of acceptance) by handing them over to the bidder against signature or by registered mail with acknowledgment of receipt.
2.7. The applicant is not allowed to participate in the auction if:
- the documents submitted by the applicant do not confirm the applicant’s right to be a buyer in accordance with the legislation of the Russian Federation;
- the applicant has not submitted all documents according to the list specified in these Regulations;
- copies of documents submitted by the applicant are not properly certified;
- the documents submitted by the applicant do not comply with the requirements of the legislation of the Russian Federation;
- admission has not been confirmed fixed time on the account **** of the amount of the deposit and (or) payment for participation in the auction.
2.8. Before the bidder is recognized as a bidder, he has the right to withdraw the registered bid by written notification to the Bidding Organizer. In this case, the deposit received from the applicant must be returned within 5 banking days from the date the Auction Organizer receives the notice of withdrawal of the application, while the fee for participation in the auction is not returned to the applicant.
2.9. If the Bidding Organizer accepts the bidder's application, the bid and the documents attached to it are sealed by the bidder in the presence of the Bidding Organizer in an envelope, which is signed by the bidder.
2.10. The auction organizer ensures the safety of applications submitted by applicants with the documents attached to them, as well as the confidentiality of information about the number of applicants, about applicants who submitted applications, about the contents of the documents they submitted until they are announced at a meeting of the auction commission.
III. Preparation for bidding.
3.1. The auction organizer in accordance with the legislation of the Russian Federation and these Regulations:
3.1.1. Organizes the preparation and publication of tender notices.
3.1.2. Accepts applications from applicants and keeps records of them as they are received in the application acceptance register, indicating the date and time of its receipt.
3.1.3. Concludes a deposit agreement with applicants.
3.1.4. Forms an auction commission, defines its tasks and powers, approves its personal composition, and appoints the chairman of the auction commission.
3.1.5. Transfers to the auction commission on the day of bidding the received applications with the documents attached to them.

23 Jul 2008

3.1.6. Provides the auction commission with information about the deposits received at the account **** and the fee for participation in the auction, indicating the name of the applicant who made the deposit, the amount of the deposit and the date of its receipt.
3.1.7. Approves all documents drawn up by the auction commission during the bidding.
3.1.8. Concludes a purchase and sale agreement for the Property with the winning bidder.
3.1.9. Makes settlements with bidders, participants and the winner of the auction.
3.1.10. Ensures the transfer of the Property to the winning bidder.
3.1.11. Carries out the transfer and cancellation of trades.
3.2. From the moment applications begin to be accepted, the Auction Organizer provides each applicant with the opportunity to familiarize itself with these Regulations, the application, the deposit agreement, as well as other information it has about the Property being sold on the basis of a written application from the applicant.
3.3. The auction organizer, together with the auction commission, reviews the received applications with the documents attached to them and determines their compliance with the requirements of the legislation of the Russian Federation and these Regulations on the day of the auction.
3.4. The tasks of the auction commission during the auction are:
- checking the compliance of the submitted documents of the applicants with the requirements of the law and the tender notice;
- direct bidding between all participants;
- identifying the winner of the auction and monitoring compliance with the established procedure for conducting the auction.
3.5. Based on the results of reviewing the documents of the applicants, the auction organizer makes a decision on the admission of applicants to participate in the auction or refusal to admit them to participation in the auction.
3.6. Based on the results of reviewing the bidders’ documents, the auction organizer has the right to make the following decisions:
- about the postponement of trading;
- refusal to hold auctions.
3.7. In the cases provided for in clause 2.6. of these Regulations, the Organizer of the auction makes a decision to refuse the applicant to participate in the auction, and in the protocol of admission to participation in the auction a note is made about the reason for the refusal of the applicant to participate in the auction.
3.8. The applicant acquires the status of a tender participant from the moment the tender organizer signs the protocol on admission to participation in the tender.
3.9. Meetings of the auction commission are held with the attendance of more than half of its members from the list. The progress of the auction and the results of the auction are documented in a protocol signed by the chairman and members of the auction commission.
3.10. The final protocol of the auction commission, which records the results of the auction, is signed by all members of the commission who agree with decisions taken. Decisions are considered adopted if they are signed by a majority of the members of the commission from the list of the commission.
3.11. Members of the commission who do not agree with the decisions made have the right to justify their position in writing; this document is attached to the protocol on the results of the auction.

IV. Bidding procedure.
4.1. Bidding for participation in which no application was submitted, or none of the applicants is recognized as a participant, or in which only one participant took part, is considered invalid.
4.2. The auction is conducted by the auction organizer, acting as an auctioneer, in the following order:
4.2.1. One authorized representative of the bidder has the right to participate in the auction; the presence of other persons is allowed if they are registered in the protocol of those present. During the bidding, the auctioneer has the right to take video and photos, which is noted in the participant registration protocol.
4.2.2. The auctioneer announces the following information before the start of the auction:
- name of the property sold at auction;
- names of applicants who submitted bids for the auction;
- names of participants admitted to participation in the auction;
- starting price, cut-off price, deposit size, step and procedure for changing the price;
- bidding procedure.
4.2.3. During the bidding, a bidding protocol is kept, which is signed by all members of the auction commission and approved by the auctioneer.
4.2.4. The auctioneer begins the auction with the starting sale price of the Property.
4.2.5. If the auctioneer names the starting price, and no buyers for the Property at the starting price are identified, the auctioneer lowers the starting price by a bidding step. In this case, the winner is the participant who was the first to offer the highest price for the Property, but not lower than the cut-off price, provided that the other participants did not raise cards for the price offered by the auctioneer.
4.2.6. If the auctioneer, lowering the starting price by the next bidding step, reaches the cut-off price, and none of the participants raises the card, then the auction is declared invalid and the property is removed from the auction.
4.2.7. If the auctioneer names the starting price and more than one buyer (the participant who raised the card) is identified, or if the auctioneer names the bid price - the starting price minus the bidding step, and more than one buyer (the participant who raised the card) is identified, then the auction in these cases is carried out by raising the price proposals per bidding step.
4.2.8. When bidding by raising the price, further bidding begins with the bid price at which more than one buyer has emerged, and only persons who have expressed their consent to this price named by the auctioneer participate in the bidding.
4.2.9. The auctioneer names the price for the Property, increasing it by a bidding step; participants express their agreement to the price proposed by the auctioneer by raising their cards. A participant who does not express his consent (does not raise his card) to the price offered by the auctioneer does not participate in further trading. The auctioneer names the bid price until the moment when only one participant agrees with the price proposed by the auctioneer or until the moment when none of the participants raises a card indicating their agreement with the proposed price.
4.2.10. If the auctioneer announces the next step of the bidding and none of the participants raises a card indicating their agreement with the proposed price, then the winner is considered the participant who first raised the card at the previous proposed price announced by the auctioneer.
4.3. The winner of the auction is the person who offered the highest price for the property and, accordingly, higher than the price offered by other participants.
4.4. The auction is considered completed and the sale price of the property is set after the third blow of the hammer, which means that the participants have accepted the last price offered by the auctioneer.
4.5. The auction winner is determined by the auctioneer together with the auction commission. In case of disagreement between members of the auction commission, the issue of determining the winner is decided by the auctioneer.
4.6. After the completion of the auction, the auctioneer announces the completion of the auction, the fact of the sale of the property, names its sale price and the card number of the winner of the auction.
4.7. The protocol on the results of the auction is drawn up in 2 copies, signed by members of the auction commission and approved by the auctioneer on the day of the auction.
4.8. The protocol on the results of the auction, from the moment of its approval by the auctioneer, acquires legal force and is a document certifying the winner’s right to conclude a contract for the sale of Property. A notice of recognition of the bidder as the winner and one copy of the protocol based on the results of the auction are issued to the winner against receipt, or if the bidder refuses to receive the notification, they are sent by registered mail with acknowledgment of delivery no later than 3 days from the date of approval of the protocol by the auctioneer.
4.9. After the end of the auction, the bidders and the auctioneer sign a certificate of completion of the work based on the results of the auction.
4.10. The amounts of deposits made by applicants (except for the winner) are returned by the auction organizer by non-cash transfer within 5 banking days from the date of approval of the protocol based on the results of the auction. Bidding fees are non-refundable.
V. Conclusion of the contract and the procedure for notifying participants about the results of the auction.
5.1. The winner of the auction is obliged to conclude a purchase and sale agreement with **** no later than 5 working days from the date of approval of the protocol based on the results of the auction.
5.2. Payment for the Property by the winner is made within 30 calendar days from the date of conclusion of the purchase and sale agreement for the Property minus the deposit paid.
5.2.1. The fact of payment for the Property is confirmed by statements from the account **** about receipt Money in the amount and within the terms specified in the purchase and sale agreement.
5.2.2. The deposit paid by the winner to account **** is counted towards payment for the purchased Property.
5.3. The transfer of the Property to the winning bidder and the registration of the transfer of ownership rights are carried out in the manner established by the legislation of the Russian Federation and the purchase and sale agreement after full payment of the Property.
5.4. The auction organizer notifies participants about the results of the auction publicly on the day of the auction after the auction and the signing of the protocol on the results of the auction.
5.5. The notice of auction results contains the following information:
- name and location of the sold Property;
- starting and selling price of the Property, name of the auction winner.

Dutch auction - English Dutch Auction

1. An auction structure for a public offering in which the bid price is set after all bids have been accepted and the highest price at which the entire bid can be sold has been determined. In this type of auction, investors bid on the amount they are willing to buy, specifying a quantity and a price.

If a company uses a Dutch auction for an IPO, potential investors submit their proposals for the number of shares they want to purchase and indicate the price they are willing to pay. For example, an investor might bid 250 shares for $750, while another investor might bid $595 for 300 shares.

Once all bids have been submitted to the bidder, the shares are distributed among the bidders, starting with the highest bidder, until they are completely distributed. However, the price paid by each bidder will be the lowest of all those offered, that is, determined by the last successful bid. Therefore, even if an investor bid $500 for 800 shares, and the last successful bid was $375, then he would only have to pay $375 for his 800 shares.

The US Treasury (and other countries' treasuries) uses a Dutch auction to sell securities. The Dutch auction also provides alternative bidding for IPO pricing. When Google launched its public offering, it relied on a Dutch auction to get a fair price for its shares.

2. A type of auction in which the price will be lowered until one of the bidders makes a bid. The first bid made is considered a successful auction bid and will constitute a sale if the bid price is higher than the reserve price. This type of auction differs from the classic one, in which the price increases as a result of competition between bidders.

For example, an auctioneer starts at $2,000 for an object. If there are no bidders, the price is reduced by $100. The item will be sold once the bidder acknowledges that the last price advertised by the auctioneer says $1,500.

Dutch auction: from tulips to tokens

The Second-Price Dutch Auction is a relatively new model token sales. So far, this model has been applied by only three projects: Gnosis, Polkadot and Raiden Network.

The Gnosis auction in April 2017 was a striking example of how the idea of ​​rationality that guided the auction organizers did not coincide with the rationality of its participants. Their rationality was the fear of missing out, and today we can argue that this fear was well justified, since the market price of GNO at the time of writing was four times the closing price of the token sale ($120 versus $30).

What is the main difference between the Gnosis auction, which its authors called a modified Dutch auction, and the Polkadot and Raiden Network auctions? The fact is that a target amount of fees was set, upon reaching which the token sale was closed, and the Spend-All principle was not used. Fixing the target amount at a relatively low level, combined with an insufficiently high starting price, led to the fact that, in fact, the Dutch second-price auction never took place. The target amount was reached at the first, maximum price of GNO, at which 4.19% of GNO were distributed.

Projects that do not charge a maximum fee are sometimes called greedy. At first glance, Gnosis does not seem as greedy as Polkadot and Raiden Network, because a fee limit was set when selling GNO. However, in fact, the greed of the Gnosis token sale manifested itself in another way. The model of this token sale included the possibility of selling 4.19% of GNO for the maximum amount of fees, while with Polkadot and Raiden Network, buyers received all tokens, regardless of the amount collected.

Prospects for the Dutch auction in the world of token sales

The auction model of token sales has already become mainstream in the ICO world. This is not usually called an auction, but the gradual decrease in bonuses or discounts during the token sale is essentially a variation of an auction, where the price of a lot increases according to an initially specified algorithm.

The advantages and disadvantages of a Dutch second price auction with full sale and no bonuses or discounts have been described above. So far, Dutch token sales have not become mainstream ICOs, but the presence of the mentioned advantages allows us to expect the emergence of new successful examples of the implementation of this model.

The cryptocurrency industry is distinguished by the fact that projects often appear in it, problem solvers, which do not exist today. At the end of the article, let’s try to dream up a little on the topic of token sale auction models.

A Dutch auction can be not only direct, but also reverse. In a reverse Dutch auction, the price of the lot does not decrease, but increases. If in an English auction several buyers compete for the right to purchase a lot, naming an increasingly higher price, then in a reverse Dutch auction the scheme is different. In this model, there is one buyer who begins the bargaining by announcing the minimum price and gradually increases it, and several sellers compete for the right to sell him their goods. The winner is the seller who is the first to agree to sell his goods to the buyer. This auction model can also be applied to a token sale, and this will be a token sale of a completely different kind than the Dutch second-price auction.

A token sale using the reverse Dutch auction model involves one buyer, for example, a large institutional investor, and several sellers of tokens. These may be sellers of the same token, but also more interesting option, when the buyer selects several projects that sell their tokens and arranges a competition between them for the right to sell them their tokens.

First, the buyer names the lowest price, and then gradually increases it until one of the projects is the first to agree to sell its tokens at this price. Today, projects simply trade with large token buyers one-on-one, and in the proposed model, the buyer arranges open competition between projects.

This competition can also be organized in the form of an English auction, when the lot is a certain amount of money, and the bids are the number of tokens that a particular project is willing to sell for this amount of money. In this case, the project that sold its tokens at the lowest price still wins.

If the current growth rate in the number of projects going to ICO, as well as the trend towards concentration and centralization of the capital of token buyers, continues, then the necessary conditions to conduct such an auction may be formed in the very near future.

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The RHD Foundation will be allowed to hold “Dutch” auctions for the sale of land plots, which will help make housing more affordable.

For the construction of economy-class housing in Russia, they will be sold at so-called Dutch auctions, which will become a new mechanism state support certain categories of citizens when purchasing housing. Last week, the State Duma adopted in the first reading the bill “On Amendments to the federal law“On promoting the development of housing construction,” which gives the RHD Foundation the right to conduct auctions using the so-called Dutch system.

What does it mean? A “Dutch” auction is a bid to reduce the price. A striking example holding such an auction - selling flowers in the Netherlands. The US Customs Service also uses Dutch auctions to sell unclaimed goods that have been in storage for a year. There have already been precedents for holding “Dutch” auctions in Russia. All of them related to the sale of real estate.

For example, in the fall of 2011, the St. Petersburg Property Fund organized “Dutch” auctions for the sale of built-in commercial premises, most of which was of interest to representatives of small and medium-sized businesses. Sellers of state property were guided by the norm, which is prescribed in 178-FZ “On the privatization of state and municipal property.” The law calls this method of sale a “sale by public offering.”

Now the Fund conducts land auctions, where the subject of bargaining is the acquisition of the right to conclude a lease agreement for a land plot. These auctions are held according to the rules of the “English” auction: they are open in terms of the composition of participants and the method of submitting proposals for price. The winner is the developer who bids the highest price for the lot.

Unlike “English” auctions, the “Dutch” auction is won by the one who offers the maximum reduction in the price of 1 sq. m. m of economic class housing from the housing price established by the Ministry of Regional Development of Russia. The winning company will be obliged to build economy-class housing on the acquired land plot that meets the requirements of the Ministry of Regional Development of Russia, and sell it at a price fixed at the auction to certain categories of citizens, which will be established by separate regulations.

In our opinion, holding “Dutch” auctions will become one of the tools for increasing the affordability of housing. Firstly, we are talking about the targeted provision of housing to certain categories of the population who cannot purchase housing at free prices.

We assume that this list will primarily include citizens in need of state support: civil servants, military personnel, specialists in the field of healthcare and education, as well as those on the waiting list applying for improved housing conditions.

Secondly, such auctions can significantly change the pricing policy in the economy class housing segment and make it even cheaper. Currently, on certain land plots of the RHD Foundation, a maximum reduction in the sale price of economy-class housing has been recorded at the level of 10% of the price of the Ministry of Regional Development of Russia. In the process of developing bidding under the “Dutch” system, the correlation between the standard price of the Ministry of Regional Development and the actual market value of housing will become clear, which will provide real guidelines for the market.

It is now difficult to predict by what percentage the cost of housing will be reduced.

The bill provides for the possibility of selling a certain fixed volume of housing at reduced prices. In each specific case, it will be determined based on the existing need for economy-class housing and the presence of guaranteed demand from citizens wishing to purchase such housing at the specified price. If we're talking about about one auction, for example, for the sale of 10 apartments within the boundaries of the Moscow region, it is unlikely that this will significantly affect the price situation on the housing market. If we are talking about mass sales in different populated areas, then in this case it would be appropriate to expect the effect of cheaper housing.