Token Auctions
Streamlining Conversion: From Diverse Tokens to WETH
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Streamlining Conversion: From Diverse Tokens to WETH
Last updated
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SIR accrues fees in various tokens, making direct distributions to both gas-intensive and administratively complex. To streamline this, SIR utilizes an efficient auction system for converting all tokens into WETH seamlessly.
Each week, an auction is open for every unique ERC-20 token (uniqueness determined by contract address). This auction, lasting one day, allows participants to place ETH bids for the tokens. The process ensures that the highest bidder wins the tokens at the end of the auction, with immediate refunds issued to outbid participants. The process for claiming the auctioned tokens is open to anyone, facilitating the withdrawal to the auction winner.
This system presents opportunities for those interested in Maximal Extractable Value (MEV), often viewed negatively, and repurposes it into a positive mechanism for SIR. It facilitates the trustless conversion of any token into WETH, leveraging MEV for the protocol's advantage. While bids are placed in ETH for simplicity, stakers receive their dividends in WETH, marrying efficiency with ease of implementation.