The auction process makes sure the registration process doesn't give an advantage to buyers using bots to register popular domains or otherwise gaming the system. Each auction takes one week, after which the domain becomes available for direct registration. The only exception is if there was a bid in the last 24 hours of the auction (see below).
Auctions are automatically started for domains that have just expired. The auction process also applied to all domains when Tezos Domains first launched.
We use an open ascending-price auction model. In this kind of auction, you see what other people bid, but you can only bid with a higher amount than the highest bid so far.
On the domain detail, you will see a list of bids so far or (if no bids have been placed) an invitation to place the first bid. The lowest possible first bid for a domain with five letters or longer (not counting the suffix .tez) is 1, while every further bid must be at least 10% higher than the last bid, rounded to the nearest whole tenth of a tez.
A typical minimum bid sequence in is 1.0, 1.1, 1.2, 1.3, 1.4, 1.5, 1.7, 1.9, 2.1, etc.
The bidding period takes one week to finish. The only exception is if there is a bid during the last 24 hours before the bidding close: then the bidding period is extended, so it ends 24 hours after that bid, repeating until there are no more bids during the final 24 hours.
After the bidding closes, the highest bidder is proclaimed the winner. At this point, the domain ownership is not transferred automatically - the winner needs to go to the domain detail and claim the domain for themselves. They have 365 days to claim the domain, and the expiration date of their new domain will be the same no matter how long they wait before claiming it.
The former highest bid is safely stored in the contract when you are outbid by someone else. You can either use the balance to place another bid or withdraw it at any time. Your stored balance will work for all Tezos Domains bids automatically.
Your current auction balance with the option to withdraw is available on your dashboard screen.