Imaginary Ones NFT Mint — Dutch Auction

Imaginary Ones
10 min readApr 13, 2022


Written by: Caleb Hoon (kbby | imaginary ones)

Imaginary Ones (IO) will conduct our mint in two phases. A private whitelisted sale and a public dutch public (DA) sale.

IO has allocated nearly half of our collection through whitelists to build our community and connections. We’d like the other half to appeal to early supporters willing to pump liquidity into our project.

This article will discuss DA as a mint method, the pricing choice for IO’s DA, and why DA is a win for long-term supporters.


  • IO will be minting with ERC-721 smart contract, which has a more extended stability history than ERC721A.
  • Public mint will be done with a dutch auction. We are shifting a portion of what people are willing to pay to tip miners back into our project.
  • By setting DA price at 50% Opensea floor price, we expect high demand to snap up the supply.
  • Setting a maximum cap of 1.5 ETH for the dutch auction allows early supporters to enter the project at a reasonable price.
  • The public dutch auction mint allows (1) mint per wallet. We believe bullish supporters in the project will purchase multiple pieces at a fair valuation before buying an additional one during the public mint at a discount.

1. Mint Details

Phase 1 — Private Whitelist Sale
Date: Wednesday, 27th April
Time: 2am GMT+0
Duration: 24 hours
Price: 0.2 ETH
Supply: 4200

Phase 2 — Public Dutch Auction (DA)
Date: Thursday, 28th April
Time: 3am GMT+0
Duration: Until collection sells out
Price: 50% OpenSea (OS) floor price, capped at 1.5 ETH
Supply: 4488
DA details: A drop of 0.1 ETH every 15 mins until it reaches 0.2 ETH
Mint details: (1) mint per wallet

DA Start Price Scenarios:
OS floor price is 1 ETH. DA starts at 0.5 ETH (50% of floor price)
OS floor price is 2 ETH. DA starts at 1 ETH (50% of floor price)
OS floor price is 5 ETH. DA starts at 1.5 ETH (capped at 1.5 ETH)
OS floor price is 10 ETH. DA starts at 1.5 ETH (capped at 1.5 ETH

2. Contract

Imaginary Ones (IO) will be minting our Non-Fungible Token (NFT) collection with ERC-721 smart contract.

There was a consideration between ERC-721 and ERC-721A. Both contracts were written and made to run multiple instances. For ERC-721A, there were obvious gas savings for numerous mints in one transaction. However, that advantage is negligible for IO, which only allows (1) mint per wallet for the large majority of minters.

Taking gas savings out of the equation, it was a simple decision to go with ERC-721, which has a more extended stability history than ERC721A.

3. An Introduction to Dutch Auction (DA)

Dutch Auction (DA) is a reverse auction. The price starts at a predetermined price and drops at intervals until everything sells out. Here are some pros and cons of DA (not exhaustive):

Pros — addressed in heading 4:

  1. The market decides the price to buy-in. The market’s price flows directly into the project.
  2. Higher chance of selling out the entire collection.
  3. Higher price deters botters because of overexposure.

Cons — addressed in heading 5:

  1. If demand does not exceed supply, it can cause the secondary market price to fall alongside DA.
  2. Negative sentiment of the market towards DA.

This is an example to help you understand DA.

  • Fictional collection “ABC” of 10,000 pieces sets their DA starting price at 1 ETH.
  • Prices drop at 0.1 ETH every 10 minutes.
  • After 10 mins, the price dropped to 0.9 ETH, and due to its high demand, the collection sold out before it fell to 0.8 ETH.

When projects get popular, minting to the public at a low price causes an influx of people (“paperhands”) & bots attempting to purchase for an immediate quick flip.

In ABC’s case, if their floor price is 10 ETH, there will be a massive demand for it at 1 ETH mint during DA because of the immediate 9 ETH gains. That scarcity causes people to spend extra ETH to tip miners so their transactions will clear first. This phenomenon is also known as “gas wars.”

In some cases, gas wars can go up to a few ETH to tip miners. We will provide an example in point 4.1.

Numerous projects in the NFT scene have used DA. The primary reason is to shift the profits from the miners back into the projects. Rather than excessively tipping miners, DA allows early supports to inject the ETH directly into the project instead.

The underlying question is: Would you choose to inject funds into the project or tip an unknown miner?

4. Pricing the DA

The mint method’s decision is based on a study of past projects and pricing action. More projects were researched, but for this article, we will be touching on two recent projects, Karafuru* and Antonym*, that have used DA for their public mint.

*We love both Karafuru and Antonym. Only facts that are readily available on etherscan for learning purposes are stated. This pricing study can be used for your own analysis and reference.

4.1 Study A. KaraFuru -

Price before DA: 3ETH+
DA start price: 0.5ETH
DA details: Dropping 0.025 every 10 mins
Mint details: 2x mint/wallet
Supply: 2218

There is an immediate incentive to mint to gain 6x returns. With a 2218 supply, 1109 individuals can do 2x Mints. When the DA opened, it immediately sold out within seconds, with an average of 2 ETH-4 ETH gas fees spent (contract).

Two extreme examples are shown in the images below:

Example of sales #5448 and #5449
Example of sales #3555 and #3556

Analysis: The incentive of 2x returns makes sense to sell out immediately.

Spend 3 ETH+ (1ETH to mint, 2ETH+ of gas) to get a value of 6 ETH+ (the price of 2x floor pieces).

On the flip side, people who thought they could mint without sending tips saw their transaction fees burned. Dutch auction or not, if the minter believes there is high demand during a public sale, he/she should expect to tip miners to ensure the transaction clears.

4.2 Study B. Antonym -

Price before DA: 0.9ETH+
DA start price: 1.1ETH (120% of OS floor)
DA details: Dropping 0.1 every 10 mins
Mint details: 3x mint/wallet
Supply: 4000+

After Antonym’s DA started, the price of OS dropped along with the DA. It continued to fall to around 0.5ETH and stabilized there.

DA eventually dropped to 0.3ETH, and the 4k supply sold out within a minute. Note that the actual time might be slightly more than a minute due to congestions in the eth chain, but transactions were cleared within a minute.

Transactions for reference:
Piece 4888 transaction at 01:42:14am.
Piece 8887 transaction at 01:43:54:am.

After the collection sold out, there was aggressive purchasing, and the price stabilized back to around 0.6, where demand maintained it.

Screenshot from OpenSea on 9th March (Pre-reveal)

Analysis: When the prices at OS started to fall, it did not make sense for people to purchase them on DA. The speculation is that the price will continue to descend in OS.

There was a waiting game for the price to fall within an acceptable range. In this case, the sweet spot was 0.3 ETH after the price on OS stabilized around 0.5ETH as the DA continued to drop.

A perceived value of close to 60% gains (0.3 ETH purchase at DA vs. 0.5 ETH price on OS) prompted 1000+ people to pull the trigger within one minute to mint.

4.3 Conclusion of the study

Using just two examples is statistically insignificant for sample size, but it gives us a good idea of the psychology of the market.

We don’t typically see a normal distribution of sales in Dutch Auctions. It’s typically a sharp spike sellout at a specific price.

In economics, the principle of “people respond to incentives” comes to play. The perceived value of earning >60% is enough for the majority to purchase without hesitation. The quick drop in supply and downside risk of not being able to mint at all causes fear of missing out (“FOMO”), causing a sellout within seconds.

For experienced NFT traders, you’ll encounter this daily with bots that bid on your pieces. The automatic asking rate is usually 30–60% beneath the floor price.

Thus, these are three advantages of pricing it at 50% of the OS price:

  1. Demand will be high from the beginning. OS price does not fall gradually with the falling DA price, causing an artificial decline in the actual demand price.
  2. It gives people who are early adopters and bullish on our project a good entry point.
  3. It still distributes a good amount of ETH that would have gone to miners back into the project.

For early supporters who wish to increase their exposure and purchase multiple NFTs, we believe they will start accumulating numerous NFTs at a price they deem worthy and pick up the extra NFT during DA.

5. DA is a win for long-term supporters

In a traditional sense, when you inject funds into a company, you believe that the team’s long-term trajectory would provide a good return on investment (ROI).

People in the NFT scene used to have more trust in the DA system, but some projects wavered that trust. The primary source of fear is scams when founders immediately exit the project post-mint (‘rug-pull’ / “cash-grab”).

In Imaginary Ones, we give you three reasons to reinstil that trust.

  1. Reputation. The five founding team members are doxxed and have a history of success. Each individual’s LinkedIn profile is on the Imaginary Ones’ webpage. We also run two other profitable businesses in Singapore with a physical office address. If there’s concern about time to invest in this project, the two companies are well-handled by our team of capable staff, and our full attention is on IO.
  2. Accountability. We believe in our project. IO will use 90% of mint funds to re-invest and grow the business. That gives it a long runway and a sizeable war chest to hire the best talents. It increases the probability of success and allows the project to fulfill its maximum potential.
  3. Actions. The team is not afraid to do things differently. We understand the importance of consistency and doing things right. Here are some of the things we’ve built with a small team thus far:
  • Twitter account that grew organically without ads to 450k in 3 months.
  • We were committed to consistently releasing previews of the artwork. There will not be any shock on poor quality during the reveal.
  • Discord server that focuses on providing value to the community. No mindless conversations, just pure and genuine connections.
  • We built an aesthetically pleasing website with 307k unique visits (SimilarWeb).

If trust is not an issue, it boils down to price. There is a higher risk of purchasing at DA than at a mint price. The price is set at 50% below the OS floor (max. at 1.5 ETH) to mitigate pricing risk and give an early supporter rate to enter the project.

The first win we’d like to deliver is the early adopter price. If you trust in our vision and capabilities, we’ll continue to provide the quality we’ve shown you thus far (and more.)

6. Price Cap of 1.5 ETH for Dutch Auction

Although we are taking 50% OS price as the reference point for our DA starting price, it will cap at 1.5 ETH.

Here are four examples used earlier to illustrate the possibilities:
1. OS floor price is 1 ETH. DA starts at 0.5 ETH (50% of floor price)
2. OS floor price is 2 ETH. DA starts at 1 ETH (50% of floor price)
3. OS floor price is 5 ETH. DA starts at 1.5 ETH (capped at 1.5 ETH)
4. OS floor price is 10 ETH. DA starts at 1.5 ETH (capped at 1.5 ETH)

The main reason for the 1.5ETH cap is simple; we still regard minters as early supporters that believe in us. We don’t wish for you to pay beyond 1.5 ETH.

Regarding bots snatching everything up, we prepared defense mechanisms to guard against them. As a collection, it is in our interest that the holding distribution is sparse to prevent pricing manipulation. More owners also mean a higher chance of talents, skillsets, and worldwide representation in the community.

7. Conclusion

In conclusion, after our research and assessment, we believe that this is the best way to conduct the mint.

We value the supporters and discord members of our project. Thanks for the love you have showered upon us in these few months. We hope to continue this relationship beyond mint and into the future.

Team IO will allocate a portion of the development funds back into the community to continue adding value to our members.

Let’s do it together.



Imaginary Ones

Imaginary Ones is a delightful 3D animated art with 8888 magical characters NFTs on the Ethereum network.