When a name expires, it goes through a 90 day grace period, after which it becomes available for general registration. To prevent it becoming a race to register, a ‘temporary premium’ is attached, starting at $2000 and diminishing to 0 over 28 days. Done properly this results in a dutch auction for the name.
When the premium was set, $2000 was roughly the 98th percentile of all auction prices for the short name auction, and seemed like a reasonable starting price. Today, we’re seeing multiple reports of names, particularly 3 character names, being snapped up by bots the moment they become available at the maximum premium.
Long-term we can improve the mechanism by setting the initial premium based on the base price of the name (so 3 letter names start off more expensive than 5+ letter names), and by introducing a nonlinear pricing curve (for example, having the price diminish by 1% per hour for 28 days). In the short term, however, I’d like to propose setting the initial premium to a much higher value, which we can do with a simple transaction from the DAO account.
Setting the price will require some research. We need a distribution of sale prices on the secondary market, and some indication of when in the premium period names get bought - and how many get bought more or less instantly.
Is anyone up for researching either of these, so we can start to formulate a sensible start price?