---
title: "How Does a Handshake Auction Work?"
author: Erwin Groen
description: "A simple explanation of how Handshake name auctions work, from opening an auction to bidding, revealing and registering a name."
date: "2026-09-05"
image: /media/how-does-a-handshake-auction-work.png
tags:
  - Handshake
  - HNS
  - Auctions
  - Bob Wallet
  - Decentralised Naming
  - Digital Ownership
  - OwnTheDot
---

So you’ve found a Handshake name you’d like to own.

If the name is available, how do you actually get it?

Unlike registering a traditional domain name for a fixed price, available Handshake names can be allocated through an auction on the Handshake blockchain.

But it isn’t quite the type of auction you might expect.

Handshake uses a **sealed bid, second price auction**.

Let’s keep it simple.

## Where Do I Start the Auction?

One way to participate directly in a Handshake name auction is through **Bob Wallet**.

From Bob Wallet, you can search for a Handshake name and, if it is available to open, start the auction.

Bob Wallet can then be used throughout the auction process:

**OPEN → BID → REVEAL → REGISTER**

So what actually happens during that process?

## The Simple Version

Imagine Tim, Nathan and Erwin all want the same Handshake name.

They each decide what the name is worth to them and place a bid using Handshake’s native coin, **$HNS**.

**Tim bids 250 $HNS**

**Nathan bids 600 $HNS**

**Erwin bids 1,000 $HNS**

During the bidding period, they don’t know each other’s actual bids.

When bidding finishes, the auction moves into the **reveal** period.

The bids are revealed:

**Tim  250 $HNS**  
**Nathan  600 $HNS**  
**Erwin  1,000 $HNS**

Erwin is the highest bidder.

So Erwin wins.

But Erwin doesn’t pay 1,000 $HNS.

## The Second Highest Bid Matters

Handshake uses a second price auction.

That means the winning price is determined by the **second highest bid**.

Nathan bid 600 $HNS.

So:

**Erwin wins the name for 600 $HNS.**

Erwin was prepared to pay as much as 1,000 $HNS, but the price established by the auction was 600 $HNS.

The winning 600 $HNS is burned by the Handshake protocol rather than being paid to another person.

The unsuccessful bidders can recover their revealed bids after the auction process.

## Why Auction Names This Way?

Instead of watching someone bid 500 $HNS and simply responding with 501 $HNS, each person has to decide:

**What is this name actually worth to me?**

Then they bid accordingly.

That’s the basic idea behind a Handshake auction.

If you’re wondering how Handshake keeps those bids concealed, there’s one more thing worth understanding.

## Want to Go a Little Deeper?

Handshake uses something called a **blind** to help conceal the actual value of your bid.

For example:

**Erwin’s bid: 1,000 $HNS**  
**Blind: 500 $HNS**  
**Total temporarily locked: 1,500 $HNS**

Erwin needs the full 1,500 $HNS available to cover the amount being temporarily locked.

During bidding, others can see the total amount locked, but the blind helps prevent them from knowing how much Erwin is actually bidding.

When Erwin reveals his bid, the additional blind amount is released.

His actual bid remains part of the auction until the process is completed.

A simple way to remember it is:

**Your bid is what you’re prepared to pay.**

**Your blind helps keep that bid a secret.**

You don’t need to understand all the technical details behind it to understand why it exists.

## Open. Bid. Reveal. Register.

Decide what the name is worth to you.

Make sure you have the $HNS available.

Place your bid.

Reveal it.

And if you’re the highest bidder, you win with the second highest bid determining the winning price.

**Own the Name. Own the Rules. Own The Dot. ⚪️**