Understanding Your Bid: How Umia’s CCA Mechanism Works

A token’s launch event is a pivotal point in any project’s journey, especially for onchain-first projects like those launching on Umia, since Tailored Auctions help set up the onchain treasury and liquidity of every project on Umia from day one. This is why Umia is built on top of Uniswap’s Continuous Clearing Auctions, or CCAs.

Rather than selling all tokens with a single price or through a price bonding curve, CCAs structure the auction in such a way that the timing of an order never decides whether you get filled, only overall demand does, while bidding earlier simply gives your bid more exposure to the auction's lower-priced blocks. As this system is different from the usual methods, it can be hard to wrap your head around it. This is why we have made this brief guide that can help you better understand blocks, bids, clearing prices, and more.

Block-by-Block Emission and Bid Distribution

Tailored Auctions do not function like standard ICO or token Dutch auctions. Rather than having the whole token supply be allocated at a single price all at once, a CCA emits the supply throughout every single block in which the auction takes place. Similarly, bids are also spread across all remaining blocks from the moment they are placed until the auction end.

Each block releases a slice of the supply on a preset schedule, and every bid still active on that block competes for it. The clearing price can never go below the one set in previous blocks. This is because bids stay live until the auction close and cannot be withdrawn mid-auction, so demand only accumulates, while any unsold supply rolls forward into later blocks instead of discounting the price: if no new demand arrives, the price simply holds flat. Everyone who clears at the same moment pays the same price: bids above the clearing price fill in full, bids exactly at it fill pro rata, so your fill is set by demand, not by queue position.

Understanding the Early Bid Period

The early bid period is an optional round that any auction can enable, with access unlocked using zkTLS through the Umia Extension. During this period, bids are placed at the auction's starting price, though what you ultimately pay is still the average of the clearing prices when your bid is live, weighted by the supply each block releases, exactly as in the public round. The early bid round can carry a total commitment cap, as well as per-wallet caps that vary by eligibility route: larger allocators bidding across both the early and public rounds can, for example, carry a larger cap. These caps exist to keep participation broad and fair.

Auction creators can opt to include a period in which the emission per block is gated behind zkTLS buckets, giving additional configuration options to projects that want to further curate their ownership structures. If users place a bid during this period, their bids get spread out across both the gated period and all the blocks that follow.

This gated period can be tailored to target whichever audience you wish to prioritise, with some examples including:

• To open the round to people already part of your community: for instance, verify acceptance to an event on Luma, giving those who already know your protocol the opportunity to participate from the very beginning.
• To prioritise bidders who understand your market: verify prior actions that demonstrate market awareness through zkTLS criteria. For example, whether a user is a proficient prediction markets trader familiar with conditional contracts.
• To include committed larger allocators: whitelist their wallets before the sale. Their bids go through the same mechanism and pricing as everyone else's, at the same clearing price.

Eligibility is proven privately, client-side, and once verified, the user can bid automatically onchain.

How Bids are placed in Tailored Auctions

Within Tailored Auctions, a Bid consists of a budget and a maximum clearing price that acts as your price ceiling. The maximum has to sit above the clearing price at the moment the bid enters: since the price never falls during the auction, there are no dips for a lower limit to catch. When a bid is placed for an ongoing token launch, it is not all executed across a single block. Instead, the bid is spread across different blocks, with part of the bid clearing across every block from the moment it is placed until the auction's end, or until the clearing price rises above your maximum. The supply released by each block is set in milli-basis points (mps) on a schedule fixed before the auction opens, and the final amount cleared will depend on the bid time and overall demand.

In practical terms, this means that your bid's fill and final price scale with overall demand for the auction. Once the auction closes, you claim the tokens your budget bought and reclaim any unspent balance, and you never pay above your maximum. If the auction ends below its minimum raise, every bid is refunded in full.

Let’s use an example to better understand what this means. For instance, here is a hypothetical auction configuration:

• 17,500,000 tokens offered in the auction out of a 50M total supply.
• a $1.0 floor price (≈$50M FDV), a $3.5 price cap (≈$175M FDV, for a maximum raise of ≈$61.3M).
• a $20M minimum raise.
• A 7-day window made of 3 days of early bidding followed by 4 days open to everyone.

Since the bid buys a slice of supply at each block's price from the moment it enters until the auction ends, the average price of the tokens received is determined by two factors: how early one bids and the distribution of the demand.

Using the configuration above, here are a few scenarios to better understand how your bid can be affected by demand and timing:

How Demand and Timing can affect your final bidding price

Using the same example shared above, take $40M of total demand at the close, with $5M committed during the early window. The same total, arriving in three different patterns, produces three different average entry prices for the early bidders:

Total demand sets the closing price, while timing sets the discount. Demand that arrives later lifts the price more after part of the early bids has already been cleared near the floor: the later it lands, the more of the early bid was filled at lower prices.

The same applies to bids placed after the open. Taking the "all at the last block" pattern above, a bid entering halfway through the public window pays an average of ≈$1.80: between the early bidder's $1.51 and the $2.50 close, since it still catches some of the floor-priced blocks, just fewer of them. In the "all at the open" pattern, a mid-auction bid pays the closing price like everyone else. The later a bid enters, the fewer low-priced blocks it touches, and the closer its average lands to the close.

The Importance of Demand Distribution for Bids

For an in-depth exploration of how demand distribution affects the final clearing price of early bidders, we have done a simulation exploring the degree of bidding discount that happens at two scenarios for the same earliest bid period: one with all demand arriving as soon as it opens, and one at the last block.

In each scenario, rows represent the total committed during the early bid window (all early bidders combined, not one wallet), columns are total demand at the close, and each cell shows the average price an early dollar pays, with its discount against that scenario's closing price.

Bids are assumed to sit at the $3.5 maximum so they stay filled. Every scenario shown raises more than the $20,000,000 minimum, so the auction completes in all of them. Where demand pushes the price to the cap, fills are trimmed pro rata and unused money is returned. Demand levels are scenarios, not forecasts for different launches.

First scenario: all demand arrives at the open. The price is set from the first block, so everyone pays the closing price and early bidding gives no discount, whatever the amounts committed.

Second Scenario: demand arrives at the last block. Early bids buy the whole open window at the floor, and the closing price is set by the final rush. Discounts run 11% to 60%.

These scenarios outline the clearest examples of demand distribution affecting a bid placed at the earliest block possible (early bid period). However, this mechanism of demand distribution happens for all bidders, even during the public round. Depending on how future demand is spread out and how it competes across your bids every block, your final clearing price will vary:

If, after placing your bid, all demand is aggregated in the tail end, most blocks clear with little bid competition. Thus, the gap between your average price and the closing price stays wide.

On the other hand, if the demand is evenly distributed from the time you have placed your bid, the closing price will be closer to your final average price, as each block has more demand and the clearing price rises block by block.

Tailored Auctions give you a more informed way to place your bid than a traditional token launch could. Because your bid spreads automatically across every remaining block, sniping gives no advantage by design, and early entry is rewarded only through more exposure to the auction's lower-priced blocks relative to when demand shows up. Use the scenarios above as a guide, not a guarantee: demand shape is unpredictable, but understanding how block-by-block emission, price floors, and bid timing interact will help you read any Tailored Auction with a clearer sense of what you're actually receiving.

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• Umia Docs
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