The permanent registrar will require some form of mechanism to allocate new domain names to registrants. The current interim registrar operates off a vickery auction system, with four operations: (1) Start auction, (2) Bid, (3) Reveal, and (4) Finalise. Bidding and revealing are time-sensitive, and a failure to reveal can lead to loss of funds.
One proposed improvement to this system is the “rolling auction” mechanism I described at DevCon 3. In this system, no start auction action is required, and any name can be bid on at any time. Bids are then revealed in the subsequent time window, with the winner and the price being decided using the same mechanism as previously. In the event that someone bids in the same interval that someone else reveals, the late bidder is refunded their whole bid and does not take part in the auction.
This has the advantage of reducing the number of actions required from four to three, and simplifying the schedule for reveals, but reveals remain time-sensitive and the possibility of lost funds remains.
I’d also like to re-raise for consideration my proposal at the first ENS workshop, that auctions should be used when new names are made available - such as when names shorter than 7 characters are made available - but that for day-to-day registration we should revert to a simple fixed fee (or no fee, rent-only) model. Experience has shown that the auction process is a significant barrier to entry, because of the number of interactions required, the time sensitivity and risk of revealing bids, and because of the mandatory time delay before obtaining a domain.
I believe that the evidence post-launch demonstrates that the base rate of contention - multiple bids on the same name - fell substantially when the soft launch concluded, and isn’t high enough to justify mandatory auctions on all names. Those that still attract multiple bids are likely to be names that generate sudden attention such as news events and memes, and I don’t believe the value of preserving ‘fair’ allocation of those names outweighs the usability expense of doing so.