  The Maker Protocol is a decentralized finance application that enables
collateralized lending. The application uses open-bid, second-price auctions to
complete its loan liquidation process. In this paper, we develop a bidding
function for these auctions, focusing on the costs incurred to participate in
the auctions. We then optimize these costs using parameters from historical
auction data, and compare our optimal bidding prices to the historical auction
prices. We find that the majority of auctions end at higher prices than our
recommended optimal prices, and we propose several theories for these results.

Trading and Market Microstructure;Portfolio Management