Part 2

Who is typically settling Nouns auctions? Does the winner settle the auction, or does an eager new bidder settle the current auction to begin the next auction?

The data visualization reveals that over time, fewer and fewer auctions have been settled by the winner. Instead, an eager new bidder settles an existing auction, which triggers the mint of the next Noun NFT and the start of its auction.

In either case, the winner pays the winning bid, because the payment is taken at the time of bid, not after the auction is closed. Yet, it looks like Nouns NFTs have been attracting more of the eager bidders in recent months:

Introduction

Nouns are a pixel character NFT collection. Unlike most NFT projects released in one go during a fixed minting period, there is one 32x32 pixel Noun minted and auctioned off every 24 hours, forever. All the proceeds go to the Nouns DAO treasury.

Methodology

This analysis explores the minting and selling behavior and prices for Nouns NFTs (0x9C8fF314C9Bc7F6e59A9d9225Fb22946427eDC03).

The type of smart contracts that enable the Nouns NFTs, and the order in which the contract actions get executed, is unique and deserves special attention.

Auction lifecycle outline

Because each Noun NFT is distributed by 24h auction, the mint occurs at the start of the auction. The freshly minted NFT initially belongs to the Nouns Auction House (the contract actually holding it is NounsAuctionHouseProxy 0x830bd73e4184cef73443c15111a1df14e495c706).

When each new highest bid is placed, the bid amount is sent from the bidding wallet to the same auction house proxy. The auction house holds the amount until or unless the next highest bid comes in. In that case, the previous highest bidder gets a refund, and the new highest bidder gets funds withdrawn to the auction house. The auction gets extended by 5 minutes if a bid is placed within the last 5min window, allowing participants a chance to counterbid.

When the auction is finished, the highest bid amount is already with the Auction House, but the winner doesn't automatically receive their NFT. Someone needs to 'settle' the auction, which is a sequence of smart contracts that trigger the sending of the token to the winner, and the minting of the next Noun into the Auction House. Then, the clock resets and the daily bidding process starts again for the next pixelated Noun.

Auction lifecycle diagram

(via Nouns DAO docs):

Takeaways

• Mint prices for Noun NFTs vary more by date than by trait.

• Although auction participants can see what the NFT looks like before they place a bid, the appearance and traits don't seem to matter much to them. There are times of relative hype, when mint (auction win) prices are higher overall, and periods of less hype, when smaller bids win the daily auction.

• Sales of Nouns are relatively few, compared to mints. However, buyers are pickier than minters when it comes to preferred traits.

• NFTs with certain traits net higher prices on the secondary market. Traits that influence the secondary market price the most are traits with less variety, e.g. not heads, of which there are 234 kinds.

• Users are eager to start bidding once the previous day's auction is over. And they have been getting more impatient in the last months.

• In 2021, it was still quite common for the winner to settle their own auction -- an action which is part of a smart contract chain that kickstarts the bidding for the next day's Noun. In contrast, these days most auctions are settled by a user who is not the previous NFT's winner. The winner is still the one who pays for their NFT -- the amount gets taken out when the bid is placed, not after the auction ends. But anyone can trigger the settling of the auction. This sends the clock ticking for the auction on the next Noun, and the auction settler is eager for the bidding war to begin. ⏰

About

• Analyst: mar1na.eth (catscatscode)

• Contact: Flipside, Twitter, catscatscode#3578 on Discord

• Date: 12 June 2022

• Brief: Layer3 contest "Flipside Crypto: Nouns DAO".

Methodology -- cont'd

Traits

The nouns are generated as a combination of 5 random traits: backgrounds (cool or warm), bodies (30), heads (234), accessories (137), and glasses (21). These range from a taco head to . All nouns are equally rare due to the fact that traits are random based on Ethereum block hashes (a proxy in this case for perfect randomness), there is no scarcity function, and it is the intention (see nouns.wtf - Noun Traits) that over time all traits have/will occur with the same rarity.

For this analysis, Flipside Crypto generously provided the query to single out each trait from the data.

Data Results: Part 1

Analyze the mint and secondary NFT marketplace activity for Nouns DAO. Can we conclude if there are certain types of traits (body, accessory, etc.) that are causing some Nouns to sell or mint for more than others?

There is one Noun minted every day, but sales are less common. The most sales so far is 4 in a single day. This may be a result of the high price -- each Noun auctioned or sold costs a two- or three-digit amount of ETH. Although recently, the secondary market for Nouns is becoming more common:

When we break down mint prices by trait (background, head, body, etc.), mint prices don't appear to depend on any particular trait. Instead, there are time periods when mint prices are higher across all trait combinations (hype periods), and quieter time periods when winning bids are generally lower.

There is one outlier in all the charts below - the very first Noun (id 0) which was auctioned off for more than 600 ETH:

However, when we break down sale prices by trait, we can see that people tend to gravitate to some traits over others when buying on the secondary market. (The sales dataset is also smaller than the mints dataset, and this could exaggerate any apparent relationships between trait and sale price):