How do auctions work for NFTs on Foundation?

The world of NFT’s offers you exciting ways in which you can collect your art, one of them being a timed auction.

An auction is a type of sale where the seller sets a minimum price and a time period. Buyers can place bids on how much they are willing to pay for the NFT as long as they are above the minimum price. Then the NFT is sold to the highest bidder at the end of the time period. 

NFTs, or “Non-Fungible Tokens,” are one-of-a-kind tokens that represent a unique good or asset.

Read more about NFTs and how they’re transforming the digital art world on our blog.

In this guide, we’ll show you how auctions work on Foundation and offer some advice for discovering new and upcoming artists.

Foundation is a platform that aims to build a new creative economy—a world where creators can use the Ethereum blockchain to value their work in entirely new ways and build stronger connections with their supporters.

On Foundation, you can start collecting NFTs from visionary creators and find artwork that speaks to you on a personal level.

To get started, keep looking on NFT platforms until you find an artist or artwork with a vision or style that piques your interest. Then go deeper. Do as much research about the artist’s creative practice and social proof, as you need to do to build up your conviction about the NFT you want to collect.

Once you’re ready, get up to date on how auctions work and place your first bid.

How are NFT’s listed on Foundation?

NFTs are listed on Foundation in a reserve auction format.

Below are some of the main characteristics of Foundation auctions:

  • Built on Ethereum: Every interaction with auctions (placing bids, winning and claiming NFTs, etc.) on Foundation is recorded on the Ethereum blockchain. ETH is the cryptocurrency used for all transactions on the Ethereum network, and it’s the currency we exclusively use on Foundation. All of the artworks on our platform can be bid on and purchased with ETH. Creators get paid in it, too.

  • Start at a reserve price: Creators set a starting price for the auction and buyers must place bids at or above this price. Reserve prices are made public on Foundation.

  • 24-hour countdowns: After the first bid is placed on artwork at or above the reserve price, a 24-hour countdown for the auction starts. An auction comes to an end when the countdown has run out of time.

  • Time extensions for auctions: If a bid is placed within the last 15 minutes of an auction, the countdown will reset back 15 minutes. The addition of 15-minute extensions gives time for each buyer to have their final opportunity to place a bid, and for the artwork to find its true market value. Time extensions can go on indefinitely until no other bids are placed within the last 15 minutes of an auction.

Now that you have an overview of auctions, let’s jump into what it’s like to start bidding on Foundation, what happens when you win an auction, and how to add your new NFT to your digital art collection.

I found an artwork I want in my collection. How do I place a bid?

Connect your wallet to Foundation and make sure you have enough ETH in it to place a bid and pay for gas fees.

Need help setting up a wallet and getting ETH? Check out our guide here.

Go to the artwork page of the NFT you would like to bid on and click “Place a bid.”

If you’re the first to place a bid, you must exceed or meet the reserve price set by the creator. If the reserve price has already been met, the next bid must exceed the current bid by 10% or 0.1 ETH, depending on which costs less. As you are placing the bid, you’ll get an error message if your bid is too low or confirmation to proceed if your bid is all set. 

Confirm the transaction with your wallet and pay a gas fee to complete the process. You’ll need to pay for the gas each time you place a bid or submit any kind of Ethereum transaction.

To learn more about the gas fees on different platforms, click here.

When the transaction is completed, the funds will be taken from your wallet and placed in escrow in Foundation’s smart contract on the Ethereum blockchain. Foundation is a non-custodial platform, which means we don’t have access to your funds at any point in the process.

If you haven’t done so yet, you can add in your email address to receive notifications related to your bids. You can also track the transaction’s status on the Ethereum blockchain by clicking “View on Etherscan.”

I’ve placed my bids now. How can I see all of them in one place?

You can track the status of your bids by clicking on “Bids” in the upper right corner of any page. Here, you’ll be able to see all of your current and past bids on Foundation. From this dashboard, you’ll also be able to place new bids when you’ve been outbid or settle any NFTs you win in an auction.

I checked my bids page and it says I got “outbid.“ I still want to try and obtain the artwork. What do I do?

Along with seeing the status change on the bids page, you’ll also receive an email notification if you are outbid. The funds from your original bid will be deposited back into your wallet. If the auction is still live, you can place another bid higher than the current bid by clicking on “Bid again.”

After you place the new bid, your wallet will prompt you to confirm the new transaction.

Does the NFT become my property if I won the auction?

If you are the highest bidder, the reserve price has been met, and the countdown timer has expired, then — congratulations! — you won the auction.

If you added your email address to your profile, you’ll receive an email notification. To officially add it to your wallet and collection, you will need to settle the NFT which requires submitting a transaction to the Ethereum blockchain to conclude the auction.

What happens when I settle the NFT?

Make sure to settle your NFT soon after you win an auction. By settling the NFT, you’re removing it from escrow and transferring it to your wallet. This will simultaneously remove the corresponding ETH funds from escrow and send them directly to the artist.

To settle your NFT, click “Bids” in the upper right section on any page. Select “settle your NFT” next to the artwork you won. Your wallet will prompt you to confirm the transaction. Confirm the transaction and pay a gas fee to complete the process. Wait for the transaction and transfer to complete. Track the status by clicking “View on Etherscan.”

This completes the transfer of ownership of the artwork from the creator to you. Congrats, you can use it as your Twitter profile now!

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