Continuous Clearing Auctions (CCA): Simple + Technical Walkthrough

Below is a simplified, thread-style explanation (similar structure to the screenshots), followed by a more technical appendix with math and a small simulation.

1. Token Sales Are Generally Messy

Traditional token launches often look like this:

• A fixed launch time.
• Everyone tries to buy at once.
• Bots and fast traders usually win.
• The final “price” is unclear and volatile for the first hours or days.

This leads to:

• Over-paying by retail participants.
• Concentrated allocations in a few hands.
• Difficult price discovery and messy early trading.

2. The Old Token Launch Playbook

Common mechanisms and their issues:

1. Fixed price sale

• Project sets a price.
• If price is too low, it sells out instantly to bots and arbitrageurs.
• If too high, sale drags and looks unsuccessful.

2. Dutch auction (price goes down over time)

• Professional traders wait to buy as low as possible.
• Late sniping decides the outcome.
• Retail participants face a timing game they are not equipped for.

3. One-shot uniform-price auction

• Everyone submits bids once.
• The market clears at a single price.
• But it happens only at one moment in time, and liquidity must be set up separately after.

4. Direct AMM launch (e.g., immediate Uniswap pool)

• Pool starts with thin liquidity.
• Early trades move the price a lot.
• MEV and mempool competition influence who gets good fills.

3. CCA Flips the Script (Simple View)

A Continuous Clearing Auction (CCA) changes the process:

• The sale is split into many blocks (time intervals).
• You submit one bid with:
• Max price you are willing to pay.
• Amount of tokens you want.
• The protocol automatically spreads your bid across the whole sale.
• At each block, it computes a fair market price based on all active bids.
• Everyone who gets filled in that block pays the same price.

You:

• Do not have to click fast.
• Do not have to watch the price every second.
• Just specify your maximum willingness to pay and size.

4. Here’s the Core Mechanism

For each block:

1. The protocol has a fixed amount of tokens for that block.
2. It looks at all active bids and sorts them by max price.
3. It finds the lowest price at which total demand ≥ block supply.
4. That price is the clearing price for the block.
5. All bids with P_max at or above that clearing price are eligible.
6. If there is more demand than supply at that price, eligible bids are scaled pro-rata.
7. Everyone who is filled pays that same clearing price.

This repeats on every block until the sale ends.

5. “What If I Bid Too High?”

The protocol enforces a max price guarantee:

• You choose P_max (the most you are willing to pay per token).
• If the block’s clearing price P_clear is above your P_max:
• Your bid is not executed in that block.
• Your bid slices remain available for later blocks or can be withdrawn as the sale rules allow.

Result:

• You never pay more than P_max.
• If the market clears lower than your P_max, you simply get filled at the lower clearing price.

6. The “Early Bird” Effect

In CCA:

• Bidding early means your order is spread over more blocks.
• That gives you more opportunities to be filled in blocks where the clearing price is relatively low.
• If you wait until the last block:
• Your order only participates in the final blocks.
• You mostly see the later, potentially more expensive clearing prices.

So, unlike “fastest finger first,” the mechanism encourages:

• Early participation.
• Longer exposure to the full price discovery process.

7. When the Auction Ends

At the end of the sale:

1. The protocol has:

• A full record of all clearing prices and filled quantities per block.
• Total raised assets.
• Remaining unsold tokens (if any).

2. According to the configured rules:

• A portion of the raised assets and remaining tokens can be automatically deposited into a Uniswap v4 pool.
• This seeds initial liquidity at a price consistent with the auction outcome.

This avoids a separate “now we figure out liquidity” phase and gives:

• A clear history of price discovery.
• Immediate secondary trading with pre-funded liquidity.

8. Why This Matters (Conceptually)

CCA aims to:

• Separate price discovery from low-level mempool / latency games.
• Provide a uniform price per block, not per individual transaction.
• Make it harder for:
• Bots to front-run retail participants.
• Whales to dominate purely via speed.
• Provide a direct bridge from token sale → liquidity bootstrapping on Uniswap v4.

It is still an auction:

• There is competition.
• Prices can go high or low.
• But the process is better structured and more transparent.

9. Technical Appendix: Simple Example With Math

To make the mechanism concrete, consider a single-block example (one clearing event) first. A multi-block CCA just repeats this per block with bid slices.

9.1 Assumptions

• Tokens available in this block: S = 1,000.
• 10 participants submit bids with:
• Maximum price P_max.
• Desired quantity Q.

9.2 Bids

9.3 Build the Order Book

Sort by P_max descending and accumulate demand:

We first exceed the supply S = 1,000 when including participant B. Therefore the clearing price is:

[ P_{\text{clear}} = 2.20 ]

Eligible bidders are those with P_max ≥ 2.20:

• G: wants 500
• D: wants 400
• B: wants 200

Total eligible demand:

[ D_{\text{eligible}} = 500 + 400 + 200 = 1{,}100 ]

We must allocate only 1,000 tokens. Scale all eligible bidders pro-rata by factor:

[ \alpha = \frac{S}{D_{\text{eligible}}} = \frac{1{,}000}{1{,}100} \approx 0.909 ]

9.4 Final Allocations

All other participants receive zero in this block:

• Their P_max is strictly below the clearing price.
• They pay nothing and keep their capital.

No one pays above their max, and everyone filled pays the same price.

In a real CCA:

• The auction is split into many blocks.
• Each original bid is sliced across blocks.
• The per-block logic above is applied repeatedly.
• Over time, bidders experience a volume-weighted average of the clearing prices in the blocks where they are filled.

10. Short TL;DR

• You say how much you want and the most you’ll pay per token.
• The protocol spreads your bid across the sale.
• Each block computes a single fair price from all bids.
• If that price is at or below your max, you can be filled; if above, you are skipped.
• Everyone filled in a block pays the same price.
• At the end, funds and tokens can automatically seed a Uniswap v4 pool.

Sources

1. Uniswap – Continuous Clearing Auctions: Bootstrapping Liquidity on Uniswap v4 (official blog) https://blog.uniswap.org/continuous-clearing-auctions

2. Uniswap – Continuous Clearing Auctions Product Page https://cca.uniswap.org/en/

3. Uniswap – Continuous Clearing Auction Smart-Contract Repository (GitHub) https://github.com/Uniswap/continuous-clearing-auction

4. Aztec Network – Auction Terms and Conditions https://aztec.network/auction-terms-conditions

5. Markets.com – Continuous Clearing Auction: New Asset Price Discovery With Uniswap and Aztec https://www.markets.com/news/continuous-clearing-auction-uniswap-aztec-2195-en

6. The Defiant – Aztec Network Launches First Token Sale Using Uniswap’s Continuous Clearing Auction https://thedefiant.io/news/defi/aztec-network-launches-first-token-sale-using-uniswaps-continuous-clearing-auction

7. Algebra (Medium) – Continuous Clearing Auctions: A New Standard for Fair Token Launches by Uniswap & Aztec https://medium.com/@crypto_algebra/continuous-clearing-auctions-a-new-standard-for-fair-token-launches-by-uniswap-aztec-739ba1767fd7

8. Uniswap CCA Aztec Contract Instance (Etherscan) https://etherscan.io/address/0x608c4e792C65f5527B3f70715deA44d3b302F4Ee

9. Panews – A Detailed Look at the Unique Features of Uniswap’s New CCA https://www.panewslab.com/en/articles/50611532-a7d8-4f14-ad67-b460319bc720

10. Dennison Bertram – X Thread Explaining the Aztec CCA Sale https://x.com/dennisonbertram/status/1995911827171991948?s=46

Post created via email from emin@nuri.com