BIP-93: Implementing a dynamic auction reserve price

zoku

Summary

This proposal introduces a dynamic reserve price for Botto's weekly SuperRare auctions. The reserve adjusts by 0.1 ETH each week based on the previous auction's outcome: up if the work sold, down if it did not, with a hard floor of 1 ETH. Works that do not meet the reserve will not be sold at a discount; instead, they will be listed on the secondary market at 7x the reserve price active at the time of their auction, preserving their value while keeping them accessible to collectors who were not present in real time. The weekly auction remains the primary collecting event and the only venue where works can be acquired at the reserve price.
The immediate goal is to protect the perceived value of Botto's output during a slow market cycle, while establishing a transparent and predictable framework that the DAO can build on in future proposals.

Rationale

Botto mints one work per week on a fixed cadence. Unlike human artists, it cannot slow or pause production in response to market conditions. A reserve price is therefore the most direct lever available to the DAO for managing supply perception and protecting collection value during slow cycles.
The current NFT market is experiencing a slow cycle. Auction prices for Botto's weekly works have declined significantly, approaching levels that risk establishing a low anchor for the collection's perceived value.
A reserve price mechanism was successfully implemented during Botto's Genesis Period (10 ETH floor). Of 14 unsold works retained under that reserve, 11 were subsequently sold - several at multiples of 3–10x the original reserve, including one at approximately 100 ETH. Three works remain in the treasury, deliberately held as high-value assets.
The DAO's treasury is sufficiently funded from prior fundraising and Genesis sales; weekly auction revenue is not the primary driver of operational sustainability at this time.

Motivation

Selling works below 1 ETH risks devaluing the Botto collection in the eyes of existing and prospective collectors.
A dynamic reserve that responds directly to the previous week's outcome is simple, transparent, and verifiable by any DAO member without requiring calculation tools or historical data. It avoids anchoring to a single fixed number while remaining easy to communicate to collectors.
Works that do not sell at auction will be listed on the secondary market at 7x the reserve price. This preserves the primacy of the weekly auction as the main collecting event while keeping works accessible to collectors who were not present in real time - and passively captures improvements in market conditions without requiring active intervention from the DAO.
The 7x secondary listing also serves as a signal of confidence in Botto's long-term value: it makes explicit that the DAO considers reserve-priced works worth far more than their auction floor, and invites collectors to engage on those terms.

Proposal Specification

Part 1: Dynamic reserve price.

A reserve price will be applied to every weekly Botto auction on SuperRare starting the first auction cycle following approval of this proposal.

Reserve calculation:

If the previous week's work sold above the reserve: the reserve increases by 0.1 ETH for the following auction.
If the previous week's work did not sell: the reserve decreases by 0.1 ETH for the following auction.
Floor: 1 ETH minimum at all times.
Example: the current reserve is 1.5 ETH. The work sells for 1.5 ETH → next week's reserve is 1.6 ETH. The following week the work does not sell → reserve returns to 1.5 ETH.

The core team is responsible for configuring and updating the reserve on SuperRare each week, based on these parameters.

Part 2: Policy for unsold works

Works that do not meet the reserve price will be listed on SuperRare (or equivalent existing platforms) at a fixed price of 7x the reserve active at the time of their auction. The core team is responsible for managing these listings. This approach serves three goals simultaneously:

It preserves the primacy and urgency of the weekly auction as the primary collecting event: the only opportunity to acquire a work at the reserve price.
It keeps works available to collectors who were not present in real time, without requiring active DAO intervention to release them.
It passively captures improvements in market conditions: as demand grows, works priced at 7x reserve become increasingly attractive without any further decision by the DAO.

Budget

No additional budget required. Implementation involves parameter configuration on SuperRare by the core team and management of secondary market listings, both of which are within existing operational capacity.

Criteria of Success

No work sold below 1 ETH.
Average sale price above 1 ETH at the end of the period.
Secondary market sales.

Disadvantages & Risks

Accumulation of unsold works: if the market remains slow for an extended period, the secondary market listings may not clear and the number of unsold works will grow. This risk is mitigated by the dynamic nature of the reserve (it adjusts downward toward the 1 ETH floor) and by the 7x secondary listings, which remain available indefinitely without requiring DAO action. Should the backlog become significant, the DAO retains the ability to address it through a separate governance proposal.
Reduced auction activity and visibility: weeks without a sale may dampen community engagement and reduce Botto's public presence on SuperRare. This is a real cost to be weighed against the benefit of not establishing a low price anchor for the collection.
Voter turnout: there is a risk that voters become less engaged if reserved works don't sell and rewards feel less tangible. The counter-argument is that better-selected works are more likely to clear the reserve, maintaining incentive alignment. Additionally, secondary sales at 7x reserve would generate meaningfully higher rewards than discounted auction sales.
Market conditions may not improve: if the bear market is prolonged, the reserve does not solve the underlying demand problem. This proposal is explicitly designed as a protective measure during a slow cycle, not a demand-generation strategy. It is intended to be one part of a broader DAO response, not a standalone solution.

Ben

I support this proposal. I feel that Botto should not be a forced seller of its work, especially in a slow market like this. Instead, it should be able to exercise the freedom to respond to market demand as do most successful artists in this space. Other artists may slow down their supply in such a market, but since Botto mints on a weekly basis, its best option in my view is to set a minimum amount that it's willing to sell its work for. I think that this proposal is a compelling way to achieve this.

The only thing I'd change in this proposal is the listing of unsold works at 7x their reserve. There are already Botto works available on the secondary for well under 7eth, which is the minimum price works would be listed at under this proposal as it currently stands. I get the reasoning, but it feels arbitrary to me, and it lowers the optionality that BottoDAO has over what to do with unsold pieces i.e., how/when to sell them, whether to donate them, burn them etc. And having a lot of pieces listed is not the best look in my view as it removes a sense of scarcity.

Other than that, I think that this is a great proposal that is both easy and important to implement.

zoku

Ben Indeed is sounds a bit arbitrary. I suggested it because it's an "optimistic" average of our best sales of Genesis works that didn't find collectors at auction and later sold for up to x10. I think I was overly optimistic and forget about that Genesis was such a unique period, but I prefer that to setting the bar too low to start the search of that correct price, given that the main goal remains to encourage participation in the auctions. In any case, I think even a x3 reserve price on the secondary market would serve that purpose. I'm open to opinions and defining this number.

Clarification: I also responded to this on Discord, to invite dialogue on the matter and see what the best solution is here.

lazyiv

Totally Agree with BIP-93 proposal. we should focus in botto reserve funds and trategy investment for botto groth.

zoku

Summary

This proposal introduces a dynamic reserve price for Botto's weekly SuperRare auctions. The reserve adjusts by 0.1 ETH each week based on the previous auction's outcome: up if the work sold, down if it did not, with a hard floor of 1 ETH. Works that do not meet the reserve will not be sold at a discount; instead, the works will be kept in the treasury, open to offers that will only be considered if they significantly exceed the reserve price at the time of the auction. This will preserve the value of the collection while keeping the artworks accessible to collectors who were not present in real time. The weekly auction remains the premier collecting event and the only place where works can be acquired at the reserve price.
The immediate goal is to protect the perceived value of Botto's output during a slow market cycle, while establishing a transparent and predictable framework that the DAO can build on in future proposals.

Rationale

Botto mints one work per week on a fixed cadence. Unlike human artists, it cannot slow or pause production in response to market conditions. A reserve price is therefore the most direct lever available to the DAO for managing supply perception and protecting collection value during slow cycles.
The current NFT market is experiencing a slow cycle. Auction prices for Botto's weekly works have declined significantly, approaching levels that risk establishing a low anchor for the collection's perceived value.
A reserve price mechanism was successfully implemented during Botto's Genesis Period (10 ETH floor). Of 14 unsold works retained under that reserve, 11 were subsequently sold - several at multiples of 3–10x the original reserve, including one at approximately 100 ETH. Three works remain in the treasury, deliberately held as high-value assets.
The DAO's treasury is sufficiently funded from prior fundraising and Genesis sales; weekly auction revenue is not the primary driver of operational sustainability at this time.

Motivation

Selling works below 1 ETH risks devaluing the Botto collection in the eyes of existing and prospective collectors.
A dynamic reserve that responds directly to the previous week's outcome is simple, transparent, and verifiable by any DAO member without requiring calculation tools or historical data. It avoids anchoring to a single fixed number while remaining easy to communicate to collectors.
Works that don't sell at auction will be open to offers at the secondary market. These offers will be displayed on the Discord/Studio so that the Dao can evaluate whether to accept them or not. As a rule this offers should significantly exceed the reserve price at the time of the auction. This preserves the primacy of the weekly auction as the main collecting event while keeping works accessible to collectors who were not present in real time, and passively captures improvements in market conditions.
This serves as a signal of confidence in Botto's long-term value: it makes explicit that the DAO considers reserve-priced works worth far more than their auction floor, and invites collectors to engage on those terms.

Proposal Specification

Part 1: Dynamic reserve price.

A reserve price will be applied to every weekly Botto auction on SuperRare starting the first auction cycle following approval of this proposal.
Reserve calculation:

If the previous week's work sold above the reserve, the reserve increases by 0.1 ETH for the following auction.
If the previous week's work did not sell, the reserve decreases by 0.1 ETH for the following auction.
Floor: 1 ETH minimum at all times.
Example: the current reserve is 1.5 ETH. The work sells for 1.5 ETH → next week's reserve is 1.6 ETH. The following week, the work does not sell → reserve returns to 1.5 ETH.

The core team is responsible for configuring and updating the reserve on SuperRare each week, based on these parameters.

Part 2: Policy for unsold works

Works that do not meet the reserve price will be open to offers on SuperRare. Since this mechanism is still under test, at the beginning, the DAO can choose whether to accept the offer or not, but as a reasonable price rule, it could be said that an offer in the secondary market should be at least x2 higher than the original reserve price of that work at the time of the auction.

This approach serves three goals simultaneously:

It preserves the primacy and urgency of the weekly auction as the primary collecting event: the only opportunity to acquire a work at the reserve price.
It keeps works available to collectors who were not present in real time, without requiring active DAO intervention to release them.
It passively captures improvements in market conditions.

Part 3: Share a report with the DAO every cycle:

-Average sale price
-Sale rate (% of works sold at auction)
-Reserve range achieved (min/max)
-Number of works accumulated
-Secondary market performance
-Comparison with the previous period (even without dynamic reserve)
-And a conclusion about this data and the overall performance

Budget

Criteria of Success

No work sold below 1 ETH.
Average sale price above 1 ETH at the end of the period.
Secondary market sales.

Disadvantages & Risks

Accumulation of unsold works: if the market remains slow for an extended period, the secondary market listings may not clear, and the number of unsold works will grow. This risk is mitigated by the dynamic nature of the reserve (it adjusts downward toward the 1 ETH floor) and by the secondary offers that the artworks might receive. If the backlog or accumulation becomes significant, the DAO retains the ability to address it through a separate governance proposal.
Reduced auction activity and visibility: weeks without a sale may dampen community engagement and reduce Botto's public presence on SuperRare. This is a real cost to be weighed against the benefit of not establishing a low price anchor for the collection.
Voter turnout: There is a risk that voters become less engaged if reserved works don't sell and rewards feel less tangible. The counter-argument is that better-selected works are more likely to clear the reserve, maintaining incentive alignment. Furthermore, secondary sales from accepted bids should generate significantly higher rewards than sales in discounted auctions.
Market conditions may not improve: if the bear market is prolonged, the reserve does not solve the underlying demand problem. This proposal is explicitly designed as a protective measure during a slow cycle, not a demand-generation strategy. It is intended to be one part of a broader DAO response, not a standalone solution.