Describing the Geo Web's approach to initializing the land market fairly.
The Geo Web project is a public good that attempts to establish legitimacy through fairness and economic efficiency (amongst other core values).
Its partial common ownership (PCO) system promotes ongoing healthy market dynamics (i.e. fairness and efficiency), but the base rules do not account for certain incentives created at the land market genesis.
Geo Web land is transitioning from ownerless/non-existent to globally claimable at launch. If any space on the Geo Web is valued for any reason (utility, speculation, or otherwise), this moment in time would represent the start of a race to claim that economic value if the launch is naively designed.
It is well-established that "first-come-first-serve" is not a fair or efficient allocation mechanism under these conditions. It's not fair because technically advanced participants have structural advantages over the average user to win these races on blockchains. It's not efficient because funds that could go toward the project/public goods are consumed with high transaction fees. To top it all off, these races create negative externalities for the underlying blockchain network and its users through network congestion (see: Yuga Labs' Otherside metaverse launch for a perfect demonstration of these issues).
The auction will last 30 days (December 15, 2022, to January 14th, 2022, 17:00 UTC). It starts with a high claim fee of 100 ETHx which linearly decreases each second until it reaches the minimum
For Sale Priceof .005 ETHx at the end of the auction period.
This claim fee is uniformly applicable to any parcel claim across the globe at the given time during the auction. It is a one-time fee and does not interact with the ongoing requirements of ownership in the PCO market.
Here's an example:
This structure provides a straightforward mechanism to prioritize competing parcel definitions (parcels can't overlap) and creates efficient price discovery for the new land assets. It allocates Geo Web land to those that value it the highest and can justify the cost through economic value creation (just as the ongoing market does).
The initial funds generated during this auction will fund public goods and may be an important part of bootstrapping the network in its nascent phase, but "revenue" maximization is never the primary goal of the Geo Web.
Making initial land claims "free" may sound noble (and fairer to those with less capital), but that is just not how it would play out in practice if there is any competition/demand: the claim process would devolve into the FCFS race described in the opening of this article.
If there is no competition for a given area (e.g. a low-population area or a single-family home), then the auction will end with the minimum
For Sale Price. All interested participants will have been given a fair chance to back their claim(s) with a payment of commensurate value.