Bid proceeds will fund ongoing ENS operations. Use of excess funds is open for discussion too.
As I understand it, this means that rather than fees getting burned like in the current 7+char auction, they’ll be going to a wallet the ENS team controls. They’ll decide what they need for their operation and what happens with the excess. I know you guys and trust your judgement but this model stands out in contrast to the way I expected things to work. I respected the original financial model because it didn’t give any extra power to the contract owner, nobody else was going to be able to come and undercut it in some way.
If the ENS team get payed by the bidding process then they are trading trustlessness for eth. Regardless of how the bidding system is set up, the team can almost guarantee that a person of their choice receives the name they want, they can win the auction by putting down an unreasonable amount and simply paying it back from the ENS wallet it goes into. It incentivises corruption.
I don’t have a great solution that doesn’t involve burning the coins but I’m still not a fan of this one.
As for the bidding process, I’m not a fan of having all the short char bids go live at once, a lot of people,(me included) have a very limited amount available to spend on an ENS name. They can either go all in on one they really want or they can split up their already small bid and go for a few in the hopes that they end up with something. I’d be surprised if this didn’t turn a lot of people off of the idea completely.
One last thing, did people not like the idea where the higher a bid is, the longer it gets account locked for. I.e. a name won for 0.01 eth isn’t locked at all and one won for 1000 eth gets locked for 5+ years. You could complicate it a bit more by allowing the bidders to choose the lock time they are comfortable with, someone registering their own name will be happy holding it for 10 years but a squatter certainly won’t be. This makes the auction more complex in return for adding a lot of friction to resellers.
Apologies for the long message, I’m sure a lot of what I mentioned has already been tackled and it’s very possible that I’m missing things.