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Sell

TL;DR

The Sell phase operates a sequential Dutch Auction for each Collection the protocol supports. Auctions are priced in the associated RUN token, adding a third price variable (ETH<>$LOOP<>RUN), creating sell-side arbitrage opportunities

How It Works

Vault Queue ──→ Dutch Auction (priced in RUN)
                    │
                    ▼
              ┌──────────────────────────────────────────┐
              │  Start: Entire circulating supply of RUN │
              │  End:   Reserve floor                    │
              │  Duration: 1 week                        │
              │                                          │
              │  Unsold at floor: stays listed until sold│
              └──────────────────────────────────────────┘
                    │
                    ▼
              Sale Proceeds
                    │
          ┌─────────┴─────────┐
          ▼                   ▼
    Buy + Burn (30%)     Buy + Bank (70%)
    Leveraged buyback    Leveraged borrow
    + burn RUN           + hold $LOOP


On sale ──→ next auction starts immediately

Dutch Auction

NFTs in the vault queue auction sequentially. One Dutch auction runs at a time per collection. The starting price equals the entire circulating supply of the collection's RUN token and decays over one week toward a reserve floor: a minimum price in RUN below which the NFT will not sell.

If no buyer executes before the floor, the NFT stays listed at the reserve price until sold. The next auction starts immediately after sale.

Arbitrage

Auctions are priced in the collection's RUN token rather than $LOOP. Buyers evaluate the arbitrage opportunity across three moving variables: the auction price in RUN, the RUN/$LOOP exchange rate, and the NFT's ETH floor on external marketplaces.

An opportunity exists when the auction price converted through RUN → $LOOP → ETH falls below the external floor.

The vault queue creates a holding period between acquisition and sale. During the holding period, all three price variables (ETH floor, $LOOP price, RUN price) drift independently. Queue depth determines hold duration: more NFTs in the vault means a longer wait per NFT. The longer the gap, the further prices can diverge from their values at acquisition, widening the arbitrage window.

Example

A Pudgy Penguin reaches the front of the vault queue. The Dutch auction starts at 1,000,000 $PUDGYRUN (the entire circulating supply) and decays over one week.

  • A trader evaluates at 300,000 $PUDGYRUN.
  • At current rates (0.0011 $LOOP per $PUDGYRUN, 0.011 ETH per $LOOP), that converts to roughly 3.6 ETH.
  • The Pudgy Penguins floor on OpenSea sits at 5.5 ETH.
  • The trader buys from the auction, sells on OpenSea, and captures the spread.