Version 1.0 | March 2025

This document presents a comprehensive design for implementing a Namespace Auction System for Reddcoin. The system establishes a two-tiered market approach where top-level namespaces are auctioned first, and those namespace owners then define the rules for user IDs within their namespace.

The namespace auction system creates a market-driven framework that:

1. Properly values premium namespace identifiers through competitive bidding
2. Allows customization of rules and economic parameters for each namespace
3. Creates a sustainable economic model with multi-level revenue generation
4. Establishes governance structures for long-term namespace management
5. Reduces squatting and speculation through significant investment requirements

Namespace owners gain the right to customize rules for their namespace and receive a share of user ID auction revenues, incentivizing them to build value and utility within their namespace.

1. Core System Architecture
2. Namespace Auction Mechanics
3. Namespace Configuration Parameters
4. Blockchain Integration
5. P2P Protocol Extensions
6. Database Schema
7. Economic Model
8. User Interface Design
9. Implementation Plan
10. Integration with User ID Auctions
11. Governance Framework
12. Appendices

The Namespace Auction System extends the Reddcoin Core protocol to facilitate the registration, transfer, and renewal of top-level namespaces through competitive bidding.

The system consists of the following core components:

1. Namespace Auction Manager: Central component handling namespace auction creation, bid processing, and auction finalization

2. Namespace Configuration Manager: Responsible for storing, validating, and distributing namespace configuration parameters

3. Storage Layer: Database structures for persistent storage of namespace auction and configuration data

4. Blockchain Interface: Mechanisms for writing namespace auction data to the Reddcoin blockchain via OP_RETURN outputs

5. P2P Relay Network: Extension of the Reddcoin P2P protocol to efficiently propagate namespace-related messages

6. User Interface: Wallet integration providing namespace auction browsing, bidding, and configuration

1. Namespace Creation:

   • User requests to create a namespace auction
   • System validates namespace ID availability and format
   • User defines namespace configuration parameters
   • Auction is recorded on blockchain and propagated via P2P network

2. Bidding Process:

   • Users view available namespace auctions and place bids
   • Bids are validated against auction requirements
   • Valid bids are recorded on blockchain and propagated
   • Previous high bidders are notified about being outbid

3. Auction Finalization:

   • System detects auction end based on time parameters
   • Highest valid bid is determined as winner
   • Namespace registration is processed for the winner
   • Configuration parameters are stored and distributed via P2P

4. Namespace Management:

   • Namespace owner can update certain configuration parameters
   • Updates are validated and propagated through the network
   • Periodic renewal of namespace ownership is required

For a valid namespace auction:

1. Namespace ID Format:

   • Length: 1-15 characters
   • Allowed characters: lowercase letters (a-z), numbers (0-9), hyphen (-)
   • Cannot begin or end with a hyphen
   • Must be unique across the system

2. Auction Duration:

   • Minimum: 14 days
   • Maximum: 30 days
   • Default: 14 days

3. Deposit Requirements:

   • 20% of bid amount must be deposited
   • Higher percentage than user ID auctions to ensure serious participation

4. Reserve Prices:

   • Minimum: 10,000 RDD
   • Single character: 100,000 RDD minimum
   • Two characters: 50,000 RDD minimum
   • Three characters: 25,000 RDD minimum
   • Four+ characters: 10,000 RDD minimum

The namespace auction follows this defined state flow:

[Initial State] → [Namespace Auction Creation] → [Namespace Auction Open] → [Auction Ended] → [Namespace Active]

Detailed state flow is visualized in the namespace auction flow diagram referenced in the appendices.

1. Minimum Increment: New bids must exceed the current highest bid by at least 5%
2. Deposit Requirement: Bidders must include a 20% deposit of their bid amount
3. Anti-Sniping: Auctions extend by 12 hours if a bid is placed in the final 24 hours
4. Maximum Extensions: Limited to 5 extensions to ensure eventual completion
5. Validation: Bids must include proof of funds and be cryptographically signed

1. Once auction time elapses, the auction enters the finalization phase
2. The highest valid bid is identified as the winner
3. The winner's full bid amount is processed according to the revenue distribution model
4. Deposits from losing bidders are refunded (minus processing fees)
5. The namespace is registered to the winner's address
6. Configuration parameters are stored and distributed to the network

Namespace owners can configure multiple parameters that govern how user IDs within their namespace operate:

1. Allowed Characters:

   • Letters (a-z) are always allowed
   • Numbers (0-9) can be toggled on/off
   • Hyphens (-) can be toggled on/off
   • Underscores (_) can be toggled on/off

2. Length Requirements:

   • Minimum length: 1-10 characters (configurable)
   • Maximum length: 5-64 characters (configurable)
   • Default: 3-32 characters

1. Revenue Distribution:

   • Namespace Owner: 5-10% (configurable within platform limits)
   • Burn Rate: 50-80% (configurable with minimum 50%)
   • Node Operators: 5-25% (configurable)
   • Development Fund: 5-15% (configurable)
   • Total must equal 100%

2. Pricing Tiers:

   • Custom minimum prices based on name length
   • Can be adjusted to prioritize certain length ranges
   • Platform enforces minimum values for each tier

3. Usage Incentives:

   • Discount multipliers for active usage
   • Penalty multipliers for inactive names
   • Custom bulk ownership penalties

1. User ID Auction Duration:

   • Minimum duration: 1-7 days (configurable)
   • Maximum duration: 3-14 days (configurable)
   • Default: 3-7 days

2. Bidding Rules:

   • Minimum bid increment: 1-10% (configurable)
   • Deposit requirement: 5-20% (configurable)
   • Anti-sniping extension period: 1-24 hours (configurable)

1. Renewal Period:

   • Duration before renewal required: 180-730 days (configurable)
   • Default: 365 days

2. Grace Period:

   • Duration after expiration before auction: 14-60 days (configurable)
   • Default: 30 days

3. Renewal Fees:

   • Base percentage of equivalent auction price: 25-75% (configurable)
   • Default: 50%

The system uses Reddcoin's OP_RETURN capability to record namespace auction data on-chain, with specialized formats for different namespace operations:

0     2  3          7    8         16   17   25    26     34       35    39          74  
|-----|--|----------|----|---------|----|-----|-----|------|---------|----|----------|
magic op  auctionId type nameHash  ns   start  end  reserve depositPct configHash

The full configuration is too large for OP_RETURN, so only a hash is included. The complete configuration is transmitted via P2P.

0     2  3          7    8       16    17    25
|-----|--|----------|----|---------|----|-----|
magic op  auctionId hash bidAmount time

0     2  3          7    8       16    17    25
|-----|--|----------|----|---------|----|-----|
magic op  auctionId hash winAmount time

0     2  3          7    8       16
|-----|--|----------|----|---------| 
magic op  auctionId hash time

The system defines the following new operation codes:

New consensus rules are implemented to enforce:

• Validity of namespace operations
• Correct sequence of state transitions
• Appropriate fee payments
• Authorization of operations
• Namespace configuration parameter boundaries

The P2P protocol is extended with additional message types for namespace operations:

Since the full namespace configuration is too large for OP_RETURN, it's distributed through the P2P network:

1. When a namespace auction is finalized, the winner's configuration is stored in the local database.
2. A configuration hash is included in the blockchain transaction.
3. Nodes can request the full configuration by sending a MSG_NAMESPACE_CONFIG_REQUEST message.
4. Nodes with the configuration respond with a MSG_NAMESPACE_CONFIG_RESPONSE message.
5. Receiving nodes validate the configuration against the hash from the blockchain.

Nodes can subscribe to namespace events:

• Filter by specific namespaces of interest
• Receive notifications about auctions, bids, and configuration changes
• Prioritize relay of namespace messages to interested nodes

Stores information about all namespace auctions.

Stores information about bids on namespace auctions.

Stores the active configuration for each namespace.

Stores pricing tiers for different name lengths within a namespace.

Stores usage-based discount tiers for a namespace.

Stores bulk ownership penalty tiers for a namespace.

Namespace values are determined by several factors:

1. Length and Readability: Shorter, more readable namespaces command higher prices
2. Common Words: Dictionary words and common terms have higher value
3. Specialized Markets: Namespaces targeting popular sectors (finance, gaming) have premium value
4. Market Competition: Auction process ensures price discovery

The namespace auction system includes a flexible revenue distribution model:

1. Platform-Level Controls:

   • Minimum burn rate: 50% of all namespace auction proceeds
   • Maximum namespace owner share: 10% of user ID auction proceeds
   • Minimum node operator share: 5% of proceeds
   • Minimum development fund: 5% of proceeds

2. Namespace-Level Configuration:

   • Namespace owners configure exact percentages within platform limits
   • Typical configuration: 70% burn, 10% namespace owner, 15% nodes, 5% development

3. Implementation Mechanisms:

   • Burn: Tokens sent to provably unspendable addresses
   • Namespace owner: Direct payment to owner's wallet
   • Node operators: Distribution to active full nodes
   • Development fund: Multi-signature wallet

Namespace ownership requires periodic renewal:

1. Renewal Period: Typically 365 days (configurable 180-730 days)
2. Renewal Fee: Based on several factors:
   • Base fee: 25% of equivalent auction price
   • Usage multiplier: Based on number of active IDs in namespace
   • Activity multiplier: Based on transaction volume in namespace
3. Grace Period: 30 days (configurable 14-60 days)
4. Reclamation Auction: If not renewed, enters public auction with no priority for previous owner

The namespace system creates aligned incentives:

1. Namespace Owners: Motivated to increase value through:

   • Promoting their namespace to users
   • Setting fair and competitive pricing
   • Creating useful services around their namespace
   • Maintaining reasonable rules

2. Users: Benefit from stable namespace governance:

   • Clear rules established by namespace
   • Competitive pricing for IDs
   • Value-added services

3. Network: Benefits from:

   • Increased transaction volume
   • Deflationary token burning
   • Development funding
   • Node operator incentives

The namespace auction browser provides a view of available namespaces:

Key features include:

• Filtering by namespace status and characteristics
• Search functionality for specific namespaces
• Detail view showing configuration and auction status
• One-click access to bidding interface

The configuration interface allows namespace creators to define parameters:

Key sections include:

• Basic Information: Namespace ID, reserve price, duration
• Character Rules: Allowed characters, length requirements
• Economic Parameters: Revenue distribution, pricing tiers
• Auction Parameters: Duration, bid increments, deposits

The dashboard provides namespace owners with management tools:

Key features include:

• Performance metrics for the namespace
• User ID statistics and trends
• Configuration update interface
• Renewal management

1. Core Protocol Extensions:

   • Define namespace auction OP_RETURN formats
   • Implement namespace validation rules
   • Create consensus rules for namespace operations

2. Database Development:

   • Implement namespace auction tables
   • Create configuration storage schema
   • Develop synchronization mechanisms

3. P2P Protocol Extensions:

   • Implement namespace message types
   • Create configuration distribution system
   • Develop subscription mechanisms

4. Economic System Implementation:

   • Implement revenue distribution logic
   • Create renewal fee calculation
   • Develop namespace valuation algorithms

5. User Interface Development:

   • Create namespace auction browser
   • Build configuration interface
   • Develop namespace management dashboard

The namespace auction system integrates directly with the user ID auction system:

1. Namespace First: Namespaces must be registered before any user IDs within them
2. Rule Inheritance: User ID auctions inherit rules from their parent namespace
3. Configuration Propagation: Namespace configuration changes affect all future user ID auctions
4. Revenue Flow: User ID auction proceeds flow partially to namespace owners

1. Validation Chain:

   • User ID requests are validated against namespace rules
   • Character set restrictions are enforced
   • Length requirements are verified
   • Pricing follows namespace-defined tiers

2. Auction Management:

   • Namespace-defined auction parameters control user ID auctions
   • Duration, bid increments, and extension rules follow namespace settings
   • Deposit requirements align with namespace configuration

3. Revenue Distribution:

   • User ID auction proceeds are split according to namespace configuration
   • Namespace owner receives their defined percentage
   • Remaining funds distributed to burn, nodes, and development

The integrated user experience includes:

1. Namespace-Specific Browsing: Users can browse user IDs within a specific namespace
2. Clear Rule Presentation: Each namespace displays its rules prominently
3. Unified Management: Users can manage both namespaces and user IDs in a single interface
4. Streamlined Renewal: Coordinated renewal notifications for both levels

The Reddcoin platform maintains governance over:

1. Parameter Boundaries: Minimum/maximum values for namespace configuration
2. Reserved Namespaces: Initial set of reserved namespaces for official use
3. Protocol Rules: Consensus-level rules for namespace operations
4. Dispute Resolution: Process for handling namespace ownership disputes

Namespace owners have governance rights over:

1. Configuration Updates: Ability to update certain parameters
2. User ID Rules: Setting character and length requirements
3. Economic Parameters: Adjusting pricing tiers and revenue distribution
4. Auction Parameters: Modifying auction duration and bid requirements

To prevent abuse, namespace governance has limitations:

1. Parameter Boundaries: All parameters must stay within platform-defined limits
2. Update Frequency: Some parameters can only be changed after minimum periods
3. Grandfather Clauses: Existing user IDs are protected from rule changes
4. Revocation Conditions: Conditions under which namespace ownership can be revoked

A framework for handling disputes includes:

1. Trademark Claims: Process for trademark holders to claim relevant namespaces
2. Abuse Reports: Mechanism for reporting abusive namespace usage
3. Arbitration Process: Multi-stakeholder process for resolving disputes
4. Appeals Procedure: Method to challenge governance decisions

• Namespace System Architecture Diagram
• Namespace Auction Flow Diagram
• Namespace Database Entity Relationship Diagram
• P2P Protocol Message Flow

• Namespace Auction Browser Interface
• Namespace Configuration Interface
• Namespace Management Dashboard
• Mobile Interface Concepts

• Namespace Valuation Analysis
• Revenue Distribution Model
• Renewal Economics Study

• Detailed Code Samples
• API Specifications
• Testing Frameworks
• Governance Procedures