# Top-of-Block Auction Parameters Review

**URL:** <https://forum.osmosis.zone/t/top-of-block-auction-parameters-review/3793>\
**Category:** Proposal Discussion\
**Tags:** passed\
**Created:** [July 7, 2025, 4:32pm UTC](https://forum.osmosis.zone/t/top-of-block-auction-parameters-review/3793 "2025-07-07T16:32:31Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![JohnnyWyles](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/johnnywyles/32/3114_2.png) [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)\
**Post date:** [July 7, 2025, 4:32pm UTC](https://forum.osmosis.zone/t/top-of-block-auction-parameters-review/3793/1 "2025-07-07T16:32:31Z")

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This proposal re-evaluates and updates the default parameters of the Top-of-Block auction module. It introduces key improvements that simplify the tokenomics, improve the efficiency of the bidding system, allow access to the proceeds by governance, and signal future value-aligned use of auction revenues.

# About Top-of-Block Auction

The Top-of-Block auction is a modification to the block construction mechanism on Osmosis that allows a bidder to ensure that their transaction goes first in the block. This mechanism enables Osmosis to tap into cross-chain, or CEX\<\>DEX arbitrage transactions while allowing competition for block space not to impact most users’ experience.

For more about the Top-of-Block Auction, check out the launch blog post: [An Introduction to the Top-of-Block Auction Mechanism](https://forum.osmosis.zone/t/an-introduction-to-the-top-of-block-auction-mechanism/2736)

# Current Status

The Top-of-Block auction module was initially deployed with [default parameters](https://lcd.osmosis.zone/block-sdk/auction/v1/params).

These are:

- Max Bundle Size: 5
- Escrow Account Address: [Module Address](https://www.mintscan.io/osmosis/address/osmo1j4yzhgjm00ch3h0p9kel7g8sp6g045qfnc9kmc)
- Reserve Fee, the minimum bid that can be submitted: 1 USDC
- Min bid increment: 1 USDC
- Proposer Fee: 5%

Despite being functional, the auction system has seen limited adoption since its deployment. This proposal aims to align the module more closely with current governance goals by lowering barriers to participation, making this revenue more accessible, and proposing that the USDC collected to be used for both OSMO liquidity provision and future discretionary token burns.

# **Proposed Changes**

1. **Redirect Auction Proceeds to the Community Pool**

2. **Reduce Minimum Reserve and Increment to 0.1 USDC**

3. **Set Proposer Bonus to 0%**

4. **Signal Future Use of Funds**

**Target Onchain Date** : 10th July 2025

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**Author:** ![LeonoorsCryptoman](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/leonoorscryptoman/32/208_2.png) [@LeonoorsCryptoman](https://forum.osmosis.zone/u/LeonoorsCryptoman)\
**Post date:** [July 7, 2025, 6:28pm UTC](https://forum.osmosis.zone/t/top-of-block-auction-parameters-review/3793/2 "2025-07-07T18:28:57Z")

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No-brainer and good to bring this concept in line with the “big brother” in the form of the normal revenue streams.

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**Author:** ![kill-dill](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/kill-dill/32/2052_2.png) [@kill-dill](https://forum.osmosis.zone/u/kill-dill)\
**Post date:** [July 8, 2025, 9:03pm UTC](https://forum.osmosis.zone/t/top-of-block-auction-parameters-review/3793/3 "2025-07-08T21:03:28Z")

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I see removing the proposer fee that usually goes to large validators as a win for decentralization.

Also, revenue streams such as this are very interesting to me. Revenue generated in USDC provides a lot of flexibility, and if used for an OSMO burn as signaled, will have the added benefit of buying up free OSMO on the market in addition to the burn.

This has my full support