Auction Design for web3

06/14/22 • 66 min

1 Listener

with @skominers @tim_roughgarden @smc90

In this episode, we go into all things auctions – which, broadly defined, are simply ways of selling and allocating scarce things – and which applies in web3 contexts to everything from NFT mints, to blockchains themselves. (Which we also go into in this episode, including an overview of the technical challenges specific to mechanism design in a permissionless context. We also briefly cover EIP 1559).

We provide a quick overview of auction types, and incentive design, and how it works in both theory and practice -- including the nuances of market-clearing prices, gas wars, and more... sharing tradeoffs, choices, and principles for builders designing these systems throughout.
Our expert guests in conversation with host Sonal Chokshi are Scott Kominers, a16z crypto research partner and professor at Harvard Business School who specializes in market, marketplace, and incentive design; and Tim Roughgarden, head of research at a16zcrypto and professor at Columbia, who led the development of the field of algorithmic game theory -- which brings together computer science and economics to solve real-world computing problems.

This conversation includes a brief mention of lotteries, which are sometimes used in conjunction with auctions, and which we kept for educational purposes only. Note there are some questions about the legality of such mechanisms like “sweepstakes” that narrow participants by requiring them to do something to enter -- so builders should NOT use these without consulting a lawyer. As a reminder, NONE of the following is legal, business, tax, or investment advice; please see a16z.com/disclosures for more important information.

with @skominers @tim_roughgarden @smc90

Previous Episode

Blockchains / Crypto / web3

with @cdixon @alive_eth @tim_roughgarden @smc90

We set some context, quickly, into the connection between blockchains, crypto, and web3 – and offer some useful analogies, and more mental models, for thinking about a blossoming area of computer science in both theory and practice.

web3 with a16z is a new podcast for anyone seeking to understand and go deeper on blockchains, crypto, and web3. It is about how users and builders -- whether artists, coders, creators, developers, companies, organizations, or communities -- now have the ability to not just "read" (web1) + "write" (web2) but "own" (web3) and build with pieces of the internet, unlocking a new wave of creativity and entrepreneurship.

Brought to you by the team at a16z crypto (and the original team behind the a16z Podcast), this show features hallway conversations, discussions, interviews, oral essays, and more on the latest and leading trends in the space, including sharing research, occasional data readouts, and insights from the top scientists, and makers, in the space. It is hosted by Sonal Chokshi, longtime showrunner (2014-2022) and host of the popular a16z Podcast and network, now editor in chief at a16z crypto; as well as a rotating cast of characters from our team who appear in and occasionally co-host episodes as well.

In the initial episodes, we start by setting some quick context, before we dive deep the rest of the season on topics ranging from auction design and mechanics, NFTs, security, zero knowledge, gaming, decentralized media, tokenomics, history, infrastructure, roadmaps, and much more -- in the form of everything from hallway conversations to interviews to oral essays; but as always, as is a signature of our other shows, with high density insights and respect for our listeners' time and attention.

You can find show notes with links to resources, books, or papers discussed; transcripts; and more at a16zcrypto.com.

This episode was produced, and edited by Sonal Chokshi. The episode was technically edited by our audio editor Justin Golden, with thanks to longtime sound engineer Seven Morris. Credit also to Moonshot Design for the art. And special acknowledgments to Chris Dixon, founder and managing partner; CMO Kim Milosevich; and several others on our team here for their support.

To follow more of our work and get updates, resources from us, and from others – be sure to subscribe to our newsletter web3 weekly; you can find it on our website at a16zcrypto.com.

Next Episode

Decentralized Creativity & Collaboration

with @RMcElhenney @cdixon @smc90

This first live taping of 'web3 with a16z' took place an event hosted by a16z crypto & Adim during NFT NYC June 20, 2022 -- with special guest Rob McElhenney* in conversation with Chris Dixon and Sonal Chokshi. Given the theme of "decentralized media"/ "decentralized content creation", the conversation covers decentralized creativity and collaboration; community, creator access; IP and evolution of the internet; and where NFTs and web3 specifically comes in... do we really need web3 for this?
We also touch on topics such as the metaverse, storytelling across mediums, managing writer’s rooms, favorite TV shows, nostalgia, and much more.
*Rob McElhenney is the creative force behind It’s Always Sunny in Philadelphia, the critically-acclaimed FXX comedy series in which he co-stars and serves as executive producer and writer; the fifteenth season premiered in December 2021, breaking the record as the longest-running live-action television sitcom in history. He is also the creator, executive producer, and star of Mythic Quest, the acclaimed comedy series that debuted on Apple TV+ (co-created by Megan Ganz and Charlie Day, and a co-production of Ubisoft and Lionsgate Television); it was recognized as one of the best new series of 2020. McElhenney is the co-founder and co-chairperson of Adim, which brings web3 technology to creative development to build a new model and value network for creators and collaborators to have a stake in the success and evolution of what they create -- initially through a scaled network of writer's rooms and through a platform for a broad character ecosystem.

**As a reminder, none of this is investment, legal, business, or tax advice; please see a16z.com/disclosures for more important information, including a link to a list of our investments.