Settling an auction

Bonded Settlement

To ensure that basket token holders get the best price possible for rebalances, Kuiper supports time-delayed settlement via a bonding mechanism that gives the rebalancer skin in the game.

The auction bonder must call settleAuction on the auction contract within 24 hours of bonding to avoid forfeiting their bond.

The bonding mechanism exists to disincentivize auction participants from bidding on an auction that they have no intent to settle.

Bond forfeiture is irreversible, and the proceeds are distributed pro-rata to basket token holders.

The settleAuction function will:

• transfer any specified tokens/amounts from the basket contract to the auction bonder

• transfer any specified tokens/amounts from the auction bonder to the basket contract

• check that the basket contains sufficient tokens/amounts to satisfy the pending rebalance

• update basket parameters to reflect the successful completion of the rebalancing process

• transfer any bounties on the rebalance to the auction bonder.

Atomic Settlement

It is also possible to atomically bid on a rebalance and settle an auction without posting a bond.