One of the most important parts of learning how to buy and sell NFTs is understanding an NFT auction. Because, although direct sales are pretty common, if you’re looking for super hyped, collector material – you go for auctions!
But, knowing exactly how these non-fungible auctions work gives you a better winning chance. It also sets the stakes high and makes things all-in-all more exciting. It also includes a lot more interaction in a completely virtual crypto world! So, we’re going to give you a complete rundown of what an NFT auction is and how it works!
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#1 What Is an NFT Auction?
So, first, before we begin, we’re gonna start with defining what an NFT auction is. An NFT auction is a type of sale that includes listing specific NFTs for sale to potential buyers. Buyers then proceed to “bid” on how much they want to spend for the NFT in sale. However, it has to be higher than the minimum price.
Finally, the auction ends and the NFT goes to the highest bidder at the end of the sale period!
#2 How Does an NFT Auction Work?
And then, there’s an understanding of how an NFT auction works. However, determining exactly how these auctions work largely depends on the type of auction in action!
Types of NFT auctions:
- Timed Auction
The Time Auction – aka the English Auction – works on the concept of the highest bidder. In other words, the transaction sells to the highest bidder. You make an offer on a fixed-price listing which the seller can accept.
- Dutch Auction
A Dutch NFT Auction works in a slightly different manner where the price falls from the opening bid. The opening bid is usually deliberately overpriced and starts declining over time.
- By Admission of Participants
This type of auction depends on the admission of participants: Open or Closed. Open means that any user on the platform can participate. While a closed auction means that users have to get an invitation or be on a whitelist to join!
Also, you should note that an NFT auction closes off to new bids at the end of the set timer. There would be a countdown indicating the upcoming end of the auction. And, for new bids coming in the last 15 – 20 minutes, the timer resets for another 15 – 20 minutes. This continues on until there are no more bids.
#3 How to Bid in an NFT Auction?
Now, there’s an understanding of how to bid in an NFT auction which is an easy procedure. All you have to do is follow the steps below:
- Sign up and connect your wallet to the NFT marketplace hosting the auction
- Find the auction that you want to join
- Select the NFT you want to submit a bid on and view the current bid and remaining time
- Place a bid that is higher than the amount of the current bid and click ‘Place a Bid’
- Confirm your bid
- If your bid is accepted (the highest bid), the transaction goes through on the blockchain and the NFT is yours!
#4 How to Start an NFT Auction?
Also, if you wanna be the one holding the reins of an NFT auction, you also have a few steps to follow. You can always use this method to sell your NFTs online without going for a fixed price. So, to do that, follow the steps listed below:
- Sign up and connect your wallet to the NFT marketplace of your choice
- Mint your NFT or select one directly from your wallet
- List your NFT for sale through the ‘Auction’ option
- Wait for buyers to start placing their bids
- At auction close, you will receive a notification of the highest bidder!
Note: you should keep in mind that you’ll have to pay gas fees for canceling a bid or listing. Selling an NFT – in any method – requires paying gas fees. But, keep in mind that canceling the sale requires an extra gas fee because it uses extra processing energy on the blockchain!