DADA and The Channel Auction
A radical experiment
We just came back from Detroit, where we attended the Radical X Change conference and heard some very smart people’s ideas on how to make the world a more democratic and just place for all.
At this conference, DADA helped test the concept of a channel auction for the first time ever. This alternative auction style was designed by Eduardo Azevedo, David Pinnock, and Glen Weyl.
The channel auction is a combination of a Dutch auction, in which a high price is set and bids go down from that, and an English auction, which starts with a base price that rises until one person pays top price. The creators of the auction believe that the channel auction outperforms both Dutch and English auctions.
It creates an interesting dynamic that discourages speculative races to the top and gives people a frame in which to place their idea of value. The channel auction is suited for things like property or real estate projects that may be in development or that can change over time. If you want to guarantee that you get what you’re bidding for, you can pay the high price and end the suspense. But you may also hold off on bidding until the countdown price and the bids start to converge, which achieves a sort of balance on what people may find reasonable to offer. That’s when things get exciting.
DADA being what it is, we added the complication that people were going to bid on a collaborative visual conversation that did not exist yet and that was going to be created simultaneously as people bid. This was one of the ideas we hatched at our brainstorming retreat in Sedona last Summer with our advisor Justin Gary. We were thrilled to be able to test it out.
We had a group of seven artists from Chile, Italy, Mexico, Croatia, and Kenya creating the conversation in a 2-hour time frame, which gave them 15 minutes each to create a drawing. The audience in Detroit could see the core group of 7 artists drawing via Google Meet. Each one of them shared their screen so people could watch art being created live. We also showed the conversation as it was being posted on DADA and the branches that were being created by others joining the conversation.
Judy was the auctioneer and engaged people to bid as she explained the finer points of DADA, the blockchain, NFTs, and she spoke about the artists who were participating. She had the help of our friend Jim Waugh, and of our dear cryptofriends in the audience, Fanny Lakoubay, Ruth Catlow, Johhny Dollar, CriptoDani, Simon De La Rouviere, who spoke about his new work, This Art is Always on Sale, Matt Prewitt from Radical X Change, and other adventurous souls. A special shoutout to Bea, our founder, who instigated the whole thing with the Radical X Change folks, Jennifer Lyn Morone, Matt, David, and Glen.
By the end of those two hours, we had a total of 17 drawings by 10 artists in 8 countries. Kudos to Otro Captore in Valparaíso and Boris Toledo in Santiago, Chile, Moxarra in Mexico City, Simon Wariuko in Nyandarua, Kenya, Isa Kost in Milan and Serste in Tuscany, Italy, Mlibty in Zagreb, Ophelia Fu in Birmingham, England, Alex Henry in Asheville, NC, and Lushan somewhere in China. Artist Vanesa Stati coordinated the live meet from Argentina and Abraham our CTO provided tech support. We are grateful to them all.
Very close to the time limit, the high price had come down to below $5000 and the highest bid was up to $1350. Two bidders were duking it out and then they did something astonishing, yet unsurprising for this community. They split their bids and decided to co-own the conversation at the high price of $3125. Instead of doing the selfish thing and having a single winner for less, they showed their support and appreciation by pooling their bids to give the artists more, which is an unexpected corollary of the channel auction, and quite possibly a consequence of how collaboration can broaden our individualistic mindset — one artwork by one artist/one winner — into a more generous, more inclusive paradigm.
Two collectors, Simon and Yogi, now own the entire visual conversation, each drawing being an NFT ERC 721. Any future transaction will require multi-signatures from the two owners.
The earnings will be distributed to the artists as follows: 70% equally to the artists that drew during the auction and 30% will go to a DADA community fund.
The experiment worked, but this is only the beginning since now we have another experiment on our hands: this collaborative artwork entails artists in 10 different cities across 4 continents, plus 2 collectors, one in California and the other one in South Africa. A community has formed around this artwork and we’re looking forward to seeing what it collectively decides to do with it. From shared decision-making and profit sharing and the fair distribution of royalties to adding creative layers such as music, or animation, the possibilities are endless.
Collaboration inspires more collaboration. Bravo.