Not just for the highest bidder: ‘Mutant’ auction seeks to ensure everyone benefits

Bounce Finance’s “auction as a service” looks to revolutionize bidding, starting with a new spin on an old format

article-image

Pressmaster/Shutterstock modified by Blockworks

share

Bounce Finance has designed a unique decentralized auction model called the Mutant English Auction.

Incorporating elements of a classic English auction with DeFi techniques, this auction aims to provide more opportunities and benefits to participants and spur higher participation rates.

In an English auction, bidders publicly increase their offers to buy an item starting from a base price. The highest bidder wins. Losers go home with nothing.

The “Mutant” twist

In the modified auction method, both the auctioneer and the previous bidder benefit from a higher bid, unlike standard auctions where only the winner gains an advantage.

This encourages more people to participate  — in game theory terms, overcoming “entry deterrence” — since they won’t go home empty-handed even if they tap out.

In this auction, the highest bidder doesn’t always pay the final price. The sharing mechanism can lead to a higher actual price, potentially increasing revenue for the auctioneer. Thus, both bidders and the auction house have incentives to participate.

Encouraging more participation increases the final price for the auctioneer. It’s an enticing prospect inspired by DeFi’s yield optimization principles.

The math behind the mutant

The paper goes into detail about the mathematics, but in simple terms:

  • The price of an item increases with each bid.
  • The difference between the current and previous bid is the “price appreciation.”
  • This appreciation is shared between the auctioneer and the previous bidder.
  • Bidders earn rewards based on a set percentage from the difference in consecutive bids.

As the world of blockchain and DeFi grows, this auction format could become a game-changer in how decentralized auctions are conducted in various sectors.

Bounce Finance intends to present builders with a turnkey inventory of auctions formats suitable for a variety of applications — the “Yearn Finance for auctions,” CEO Jack Lu told Blockworks.

Different auction types can satisfy the objectives of the seller, whether they want to maximize participation, ensure a fair distribution or maximize money earned.

For example, fair token launch goals can be met more effectively by random selection with a shuffle no-loss lottery-like mechanism, better than a bonding curve, Lu said.

Bounce will be trialing the Mutant English Auction itself, with a physical-digital auction combining a real-life diamond necklace paired with an NFT, later this month.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

The startup says it aims to rival Stripe and Worldpay by using stablecoins to speed merchant settlements from days to seconds

by Blockworks /
article-image

“S&P 500” for crypto comes as segment gains “established role in global markets,” S&P exec says

article-image

The S&P Digital Markets 50 Index combines 15 cryptocurrencies with 35 crypto-linked companies, offering investors hybrid exposure

by Blockworks /
article-image

Gnosis is betting that openness — not ownership — will define the future of onchain money

article-image

Crypto’s quest to imbue shareholder protections for tokens

article-image

Grass previously raised a seed and Series A rounds and plans to utilize the token purchase to execute on its roadmap