Introduction

Parcl V4 represents a fundamental architectural evolution designed to address persistent challenges in the current V3 system while unlocking new possibilities for decentralized real estate investing. The proposal centers on replacing the continuous AMM model with a Frequent Batch Auction (FBA) system that eliminates eliminates the need for passive liquidity providers, enables unlimited market scale, and enables substantial trading cost reductions. This proposal represents an opportunity for the community to collaboratively evaluate a potential solution to ongoing market balance challenges while exploring new opportunities for growth and efficiency.

The current V3 system, while innovative in bringing real estate exposure to DeFi, faces several challenges that limit its long-term sustainability and growth potential. Trading strategies that take advantage of market predictability continue to create structural losses for liquidity providers, relatively inflexible funding mechanisms prove difficult to tune for real estate markets, and the protocol's scale remains constrained by architectural limitations and Solana compute requirements for complex risk management operations. Parcl V4 proposes a comprehensive solution through Frequent Batch Auctions—a well-researched market structure that eliminates these fundamental issues while creating new opportunities for significant fee reductions for traders, market expansion, and enhanced PRCL token utility.

This isn't a unilateral decision but rather an invitation for collaborative problem-solving with the community. The team recognizes that architectural changes of this magnitude require thoughtful input from stakeholders and community participants who understand both the technical implications and practical trading considerations. The following analysis presents the rationale, mechanics, and trade-offs of this proposed evolution, with the goal of generating constructive dialogue that helps determine the best path forward.

Current V3 Challenges

The existing V3 architecture, while groundbreaking in its approach to real estate DeFi, faces several persistent challenges that impact both protocol sustainability and user experience. These issues have become increasingly apparent as the protocol has matured and attracted more sophisticated trading strategies.

Liquidity Provider Losses: The most significant challenge facing V3 is the excessive losses for liquidity providers resulting from trading strategies that take advantage of market predictability over relatively short timeframes. These strategies capitalize on predictable price movements within 3-12 day windows, creating ongoing strain on liquidity providers and disrupting market balance at the expense of LPs. This creates an unsustainable economic model where behavior prioritizes short-term gains over long-term market health, making it increasingly difficult to maintain adequate liquidity depth. Importantly, Parcl was conceived to create a liquid marketplace for real estate exposure for myriad strategies, not just swing trading speculation.

Limited Market Scale: V3's architecture creates fundamental constraints on market expansion due to Solana compute limits and the intensive risk management required for every transaction. With approximately 25 markets currently supported and an absolute maximum of 60 markets possible, the protocol is fundamentally limited by these architectural constraints rather than capital availability. Each transaction requires complex risk calculations and management operations that consume significant compute resources, making rapid market expansion challenging within Solana's block size limits.

Complex Funding Mechanisms: Real estate markets don't behave like traditional financial assets, making funding rate mechanisms particularly difficult to tune and manage. The development team and governance council frequently needs to adjust parameters and intervene in funding calculations, creating a burden on operations and introducing uncertainty for traders who struggle to predict funding costs.

Premium/Discount Complexity: The dynamic pricing mechanisms that create premiums and discounts above and below index prices require constant monitoring and frequent development team and governance council intervention. These systems are difficult for users to understand and model, creating unpredictable trading conditions that worsen the overall user experience.

These challenges aren't just operational inconveniences—they represent fundamental architectural limitations that prevent V3 from achieving its full potential as a scalable, user-friendly real estate investing protocol.

V4 Architecture: Frequent Batch Auctions

Parcl V4 proposes a revolutionary shift from continuous AMM trading to a Frequent Batch Auction (FBA) system that fundamentally restructures how real estate perpetuals are traded. Instead of relying on liquidity providers and continuous price discovery, V4 creates a zero-sum trading environment where traders compete directly against each other through periodic auctions.

The FBA system operates on 8-hour auction intervals (configurable from 100ms to 1 day based on market needs), batching all orders received during each period and executing them simultaneously at a uniform clearing price. This eliminates the trading strategies that take advantage of market predictability at the expense of LPs, while ensuring fair execution for all participants regardless of order size or timing.

V4 operates with a unified orderbook where orders can match across position types, similar to traditional futures exchanges. This allows natural order flow matching where closing positions can transfer to opening positions of the opposite direction.

Index price anchoring ensures market integrity by constraining the bid and offer prices that can participate in each auction. Buyers must bid at or above the index price, while sellers must offer at or below the index price. This prevents manipulation while maintaining the connection between perpetual prices and underlying real estate values. However, the actual execution price for all matched orders will be the volume-weighted average price (VWAP), regardless of any one individual bid and offer but rather the collective demand on each side.

All matched orders within each auction execute at the same volume-weighted average price (VWAP), calculated across all participating orders. This ensures fairness and eliminates the price discrimination that can occur in continuous trading systems.

Additionally, the FBA system provides limit order functionality out of the box. Unlike V3's market order system, investors can set bid/offer price thresholds (which must meet index price constraints) to express their interest levels and control auction participation. While the actual execution price is the calculated VWAP for all participants, investors control whether their orders participate by setting appropriate limit prices that reflect their commitment level. This gives investors much greater control over their participation decisions without requiring complex order management systems.

Note: If these auction mechanics seem complex, detailed examples with specific numbers and step-by-step calculations are provided later in the article to illustrate exactly how the system works in practice.

Academic and Institutional Backing for FBA Mechanisms

Frequent Batch Auctions aren't a novel experiment but rather represent a well-studied market structure with extensive academic backing and institutional recognition. This research foundation provides confidence that V4's approach is grounded in solid market microstructure theory rather than untested innovation.

The Federal Reserve Bank of New York has extensively studied auction mechanisms for market efficiency and stability, hosting conferences specifically focused on market structure improvements (NY Fed Market Structure Conference). Their research demonstrates how auction-based systems can enhance price discovery while reducing the advantages that high-frequency traders typically exploit in continuous markets.

The groundbreaking academic work by Budish, Cramton, and Shim on FBA mechanisms earned the prestigious 2014 AQR Insight Award (AQR Insight Award), recognizing their contributions to understanding how frequent batch auctions can address fundamental problems in market structure. Their seminal paper "The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response" (QJE Paper), published in the Quarterly Journal of Economics, provides rigorous analysis of how FBA systems create superior price discovery and market depth compared to continuous trading.

Additional research from the New York Fed, "A Market Design Perspective on the HFT Debate" (NY Fed Research), further validates these findings and demonstrates how auction mechanisms can create fairer, more efficient markets. For real estate specifically, FBA mechanisms are particularly well-suited because they aggregate information over time periods that better match the natural price discovery cycles of property markets.

This academic foundation means V4 isn't experimenting with unproven concepts but rather applying well-understood market design principles to create a more robust and fair trading environment.

What V4 Eliminates: Solving Core V3 Problems

The architectural shift to FBA allows V4 to completely eliminate several complex systems that have created operational burden and user friction in V3. These eliminations aren't just simplifications—they represent fundamental solutions to structural problems.

Eliminates Reliance on Liquidity Providers: Perhaps most significantly, V4 completely removes the need for liquidity providers. This eliminates the largest source of protocol inefficiency—LP compensation costs—while addressing the persistent challenge of LP losses from trading strategies that take advantage of market predictability in the current system.

Eliminates Funding Mechanisms: V4 removes the need for complex funding rate calculations entirely. In the frequent batch auction system, balance is inherent—a trader cannot go long without someone else either going short or selling their existing long position to them. This creates natural 50/50 balance in every market, eliminating the continuous imbalances that funding mechanisms are designed to address. Since there's always perfect balance and no LP dependencies, funding rates become completely unnecessary, eliminating a major source of unpredictable trading costs and operational complexity while contributing to natural price discovery.

Eliminates Premium/Discount Systems: The artificial dynamic pricing mechanisms that create premiums and discounts above and below index prices become unnecessary in the FBA system. Instead, buyers and sellers determine their own premiums and discounts through the prices at which they bid and offer, with all participants executing at the resulting VWAP. This creates a truly market-driven premium/discount system embedded within natural price discovery, eliminating the need for active team intervention in pricing mechanisms.

Eliminates Active Risk Management: V4's structure removes the need for frequent team intervention in market parameters and risk management. The auction system and index price constraints provide natural risk management without requiring manual adjustments or emergency interventions that can disrupt trading.

These eliminations create a much cleaner, more predictable protocol that operates with minimal ongoing management while enabling the core mission: providing real estate exposure in a liquid manner to everyone.

What V4 Explicitly Solves: Key Benefits

Beyond eliminating V3's problematic systems, V4 creates several explicit benefits that dramatically improve the protocol's economics and user experience.

Enables Significant Fee Reductions: With no liquidity providers to compensate, V4 eliminates the largest component of current trading costs and enables the team to reduce fees substantially while implementing volume-based fee incentives for active investors. This makes real estate exposure significantly more accessible to a broader range of investors.

Integrates PRCL Utility More Deeply: V4 creates direct, meaningful utility for the PRCL token through market creation fees and settlement voting. Users pay PRCL tokens to bootstrap new markets, creating natural demand for the token while enabling community-driven market expansion. Settlement voting gives PRCL holders governance power over market lifecycle decisions.

Enables Unlimited Market Scale: Without the architectural constraints and compute limitations of V3's complex risk management systems, V4 can potentially scale to 10,000+ markets. The simplified FBA architecture eliminates the intensive per-transaction risk calculations that limit V3 to ~25 markets currently (with an absolute maximum of 60 markets). This opens the door to highly granular, bespoke markets that would be impossible under V3—imagine trading specific zip codes with heavy institutional focus, neighborhoods gaining media attention, or emerging markets that investors want exposure to immediately. Any user can propose and bootstrap these specialized markets by paying PRCL fees, enabling coverage of virtually any residential real estate market without the computational bottlenecks that constrain V3.

Improves Trader Experience: The elimination of complex funding mechanisms, premium/discount systems, and active risk management interventions creates a more predictable and user-friendly trading environment. Additionally, V4 provides limit order functionality out of the box, allowing investors to express their interest levels and set participation thresholds rather than being forced into market orders. This lets investors control whether they participate in each auction while still benefiting from fair VWAP execution. Traders can focus on market analysis rather than navigating complex protocol mechanics.

Creates Natural Market-Making: In the FBA system, all traders become natural market makers through their order placement. This creates organic liquidity without requiring dedicated LP capital or ongoing compensation.

Key Trade-offs: Benefits vs. Limitations

While V4 offers significant benefits, it's important to honestly assess the trade-offs involved in this architectural evolution. Understanding these trade-offs is essential for making an informed decision about implementation.

Reduced Liquidity vs. Better Price Discovery: V3 provides continuous liquidity through LPs, but this liquidity can come with excessive losses from trading strategies that take advantage of market predictability. V4 only executes trades when sufficient crossing orders exist, which may result in less frequent trading opportunities but ensures fair price discovery without strategies that result in excessive LP losses. That said, new incentive mechanisms can be implemented to attract market makers under the V4 structure.

No Built-in Leverage vs. Risk Elimination: V3 offers leverage capabilities but with liquidation risks, complex margin management and added risk to LPs. V4 requires full collateral for all positions, eliminating liquidation risk entirely but removing built-in leverage. However, leverage functionality could potentially be added in the future through peripheral mechanisms that complement the core exchange without affecting its risk profile.

Auction Timing vs. Market Efficiency: V3 allows continuous trading but exposes users to the trade-offs of competing against high-frequency traders and extremely fast trading strategies. V4's 8-hour auction intervals mean less frequent execution but guarantee fair, simultaneous pricing for all participants and eliminate high-frequency trading advantages.

Market Scale vs. Execution Certainty: While V4 can support unlimited markets, newer or smaller markets may have periods with insufficient order flow for executions during auctions. This trade-off between market breadth and execution reliability is important for users to understand.

The question isn't whether these trade-offs exist, but whether the benefits of substantial fee reductions, LP elimination, and unlimited scale justify the limitations around timing and leverage.

How V4 Auctions Work: Detailed Examples

Understanding V4's auction mechanism requires examining specific examples that demonstrate how orders match and execute across different market scenarios. These examples use realistic residential real estate markets and position sizes to illustrate the system's functionality.

Example 1: Miami Downtown Condo Market - Complete Fill Scenario

Market Context: Miami Downtown Condo Market, Index Price: $650/sq ft Auction Period: 8-hour batch ending at 4:00 PM EST

Pre-Auction Orderbook (All Limit Orders):

• Opening a long: 2 units @ $660/sq ft (User A - bullish Miami market, expressing strong interest)

• Opening a long: 1 unit @ $655/sq ft (User B - moderate bullish sentiment, expressing interest)

• Opening a short: 1 unit @ $640/sq ft (User C - expecting correction, expressing bearish interest)

• Closing a long (sell): 2 units @ $645/sq ft (User D - closing profitable position, expressing sell interest)

Index Price Filtering Process: All orders meet the index price constraints: Buy bids ≥ $650/sq ft are eligible, Sell offers ≤ $650/sq ft are eligible, ensuring all participants bid/offer within reasonable bounds of the $650/sq ft index price.

Volume-Weighted Average Price Calculation: Buy demand (priority order - highest bids first): 2 units @ $660, 1 unit @ $655 = 3 units total Sell supply (priority order - lowest offers first): 1 unit @ $640, 2 units @ $645 = 3 units total Perfect volume match: All orders can be filled

Filled orders (all orders execute):

• All buy orders: 2 units @ $660, 1 unit @ $655

• All sell orders: 1 unit @ $640, 2 units @ $645

Total volume: 6 individual units Weighted prices: (2×$660) + (1×$655) + (1×$640) + (2×$645) = $1,320 + $655 + $640 + $1,290 = $3,905 VWAP: $3,905 ÷ 6 = $650.83/sq ft

Execution Results: All 6 units execute at $650.83/sq ft, demonstrating a complete market clearing where all participants get filled. The execution price ($650.83/sq ft) being just above the $650/sq ft index price reveals slight net buying pressure from the Miami market sentiment. This shows how V4 enables full market participation when supply and demand are balanced.

Example 2: Austin Single-Family - Partial Fill Scenario

Market Context: Austin Single-Family Homes, Index Price: $400/sq ft Market Conditions: Growing tech sector driving strong demand but limited supply available

Pre-Auction Orderbook (All Limit Orders):

• Opening a long: 8 units @ $410/sq ft (User F - tech growth bullish, expressing very strong interest)

• Opening a long: 2 units @ $405/sq ft (User G - moderate tech optimism, expressing interest)

• Closing a long (sell): 3 units @ $390/sq ft (User H - profit taking, expressing sell interest)

• Opening a short: 1 unit @ $385/sq ft (User I - rate sensitivity concerns, expressing bearish interest)

Index Price Filtering Process: All orders meet the index price constraints: Opening long bids ≥ $400/sq ft are eligible, Sell offers ≤ $400/sq ft are eligible, ensuring all participants bid/offer within reasonable bounds of the $400/sq ft index price.

Volume-Weighted Average Price Calculation: Buy demand (priority order - highest bids first): 8 units @ $410, 2 units @ $405 = 10 units total Sell supply (priority order - lowest offers first): 1 unit @ $385, 3 units @ $390 = 4 units total Limited by sell supply: Only 4 units can trade

Filled orders (by priority):

• All sell orders filled: 1 unit @ $385, 3 units @ $390

• Highest priority buy orders filled: 4 units @ $410 (from User F's 8-unit order)

Total volume: 8 units in matched trades (4 buy + 4 sell) Weighted prices: (1×$385) + (3×$390) + (4×$410) = $385 + $1,170 + $1,640 = $3,195 VWAP: $3,195 ÷ 8 = $399.38/sq ft

Execution Results: Only 4 units execute at $399.38/sq ft due to insufficient sell supply. Priority allocation ensures highest bidders (User F) get filled first. The execution price being close to the $400/sq ft index price reflects balanced price discovery from both aggressive buying ($410) and mixed selling pressure ($385, $390). Remaining unfilled orders: 4 opening long @ $410/sq ft (User F's remaining units) and 2 opening long @ $405/sq ft (User G) stay in the orderbook for the next auction, demonstrating how strong buy demand can exceed available supply in growing markets.

Example 3: Boston Residential - Price Discovery Through Aggressiveness

Market Context: Boston Residential Real Estate, Index Price: $800/sq ft Market Conditions: Seasonal rally with mixed investor sentiment

Pre-Auction Orderbook (All Limit Orders):

• Opening a long: 3 units @ $850/sq ft (User I - aggressive buyers expecting continued rally, expressing very strong interest)

• Opening a long: 2 units @ $820/sq ft (User J - moderate bullish sentiment, expressing strong interest)

• Closing a long (sell): 4 units @ $800/sq ft (User K - sellers content with index price, expressing sell interest)

• Opening a short: 1 unit @ $780/sq ft (User L - contrarian bearish view, expressing bearish interest)

Index Price Filtering Process: All orders meet the index price constraints: Opening long bids ≥ $800/sq ft are eligible, Sell offers ≤ $800/sq ft are eligible, ensuring all participants bid/offer within reasonable bounds of the $800/sq ft index price.

Volume-Weighted Average Price Calculation: Buy demand (priority order - highest bids first): 3 units @ $850, 2 units @ $820 = 5 units total Sell supply (priority order - lowest offers first): 1 unit @ $780, 4 units @ $800 = 5 units total Perfect volume match: All orders can be filled

Filled orders (all orders execute):

• All buy orders: 3 units @ $850, 2 units @ $820

• All sell orders: 1 unit @ $780, 4 units @ $800

Total volume: 10 individual units Weighted prices: (3×$850) + (2×$820) + (1×$780) + (4×$800) = $2,550 + $1,640 + $780 + $3,200 = $8,170 VWAP: $8,170 ÷ 10 = $817/sq ft

Execution Results: All 10 units execute at $817/sq ft, demonstrating how buyer aggressiveness drives price discovery above the index price. The execution price ($817/sq ft) being $17 above the $800/sq ft index price reveals strong net buying demand, reflecting the seasonal rally sentiment. This shows how V4 captures natural market sentiment—above the index price due to aggressive buyers, but below the most aggressive bids due to fair volume weighting that benefits all participants.

Example 4: Denver Residential - No Execution Due to Index Price Filtering

Market Context: Denver Residential Real Estate, Index Price: $500/sq ft Market Conditions: Market uncertainty with buyers seeking deep discounts while sellers hold firm

Pre-Auction Orderbook (All Limit Orders):

• Opening a long: 3 units @ $450/sq ft (User M - seeking discount opportunities, expressing bargain interest)

• Opening a long: 2 units @ $480/sq ft (User N - moderate discount seeking, expressing cautious interest)

• Closing a long (sell): 2 units @ $490/sq ft (User O - willing to sell at discount, expressing sell interest)

• Opening a short: 1 unit @ $485/sq ft (User P - bearish sentiment, expressing short interest)

Index Price Filtering Process: Buy bids must be ≥ $500/sq ft to be eligible, Sell offers must be ≤ $500/sq ft to be eligible.

• Buy orders: 3 units @ $450 (FILTERED OUT - below $500), 2 units @ $480 (FILTERED OUT - below $500)

• Sell orders: 2 units @ $490 (eligible), 1 unit @ $485 (eligible) Result: No eligible buy orders remain after filtering

Volume-Weighted Average Price Calculation: Buy demand after filtering: 0 units (all orders filtered out) Sell supply after filtering: 3 units available No matching possible: Cannot execute trades without eligible buyers

Execution Results: No trades execute due to index price filtering. All buy orders were filtered out for bidding below the $500/sq ft index price, while sell orders met the criteria. This demonstrates how index price anchoring prevents execution when one side of the market attempts to trade too far from fair value. All orders remain in the orderbook: buyers must increase their bids to ≥ $500/sq ft to participate in future auctions.

Price Discovery: Market-Driven Price Formation

V4's price discovery mechanism represents a fundamental innovation in how real estate markets determine fair value. Unlike traditional systems where prices are set by market makers or complex algorithms, V4 creates natural price discovery through the interaction of buyer and seller aggressiveness within index price constraints.

The Boston example above illustrates this perfectly. In a rallying market with an $800/sq ft index price, aggressive buyers willing to pay $850/sq ft demonstrate strong bullish conviction. Moderate buyers at $820/sq ft show measured optimism, while sellers range from opportunistic ($780/sq ft) to fair-value oriented ($800/sq ft). The VWAP calculation of $817/sq ft reflects this sentiment spectrum, creating a price that fairly represents the collective market view—above the index due to buyer aggressiveness, but moderated by the mix of seller motivations.

This mechanism is particularly powerful in cyclical real estate markets, which are prevalent in North America. During seasonal patterns or economic shifts, the auction system naturally captures changing sentiment without requiring protocol intervention. Aggressive buyers during market rallies push prices higher through their willingness to pay premiums, while cautious sellers during uncertain periods create natural price moderation through their reserve prices.

The index price anchoring prevents manipulation while still allowing organic price discovery. Orders that are too far from fundamental value are filtered out, but within reasonable bounds, market participants' aggressiveness levels create genuine price formation that reflects real supply and demand dynamics.

PRCL Token Utility and Market Creation

V4 transforms PRCL from a governance token into a core protocol utility with direct economic value and clear demand drivers. This integration creates sustainable token economics while enabling community-driven protocol expansion.

Market Creation Mechanisms: Users who want to create new residential real estate markets pay PRCL fees to bootstrap the market. This enables highly responsive, granular market creation—from broad geographic areas like Phoenix suburban homes or Nashville residential properties, to hyper-specific opportunities like individual zip codes with heavy institutional investment activity, neighborhoods suddenly gaining media attention due to development projects, or emerging markets that investors want to trade immediately. This creates direct, ongoing demand for PRCL tokens as the protocol can rapidly expand to cover any real estate opportunity that generates investor interest.

Settlement Voting Power: PRCL holders can propose and vote on early market settlement, giving them direct control over market lifecycles. Markets can be settled early for various reasons including lack of activity, insufficient liquidity, or general community desire for settlement. When early settlement is approved through PRCL voting, the market settles at the settlement date's index price, ensuring fair and transparent resolution. Additionally, markets that remain inactive for 30 consecutive days will automatically settle at the settlement date's index price, providing a systematic cleanup mechanism for abandoned markets without requiring manual intervention. This dual approach—both community-driven and automatic settlement—allows effective management of inactive markets while maintaining price integrity through index-based settlement. PRCL holders can both propose early settlement and vote on proposals, creating meaningful utility that goes far beyond traditional governance tokens.

PRCL Token Economics and Incentives

The V4 architecture creates sustainable economic incentives for PRCL token holders while generating natural demand through protocol usage. This represents a significant improvement over simple governance token models.

Network Effects: As more users create markets and more PRCL holders participate in settlement voting, the token becomes more valuable and useful. Early PRCL accumulation benefits from this expanding utility network.

Volume-Based Benefits: Future implementations could include PRCL staking benefits for trading fee discounts, creating additional incentives for token holding and protocol participation.

Economic Alignment: Unlike systems where token holders extract value from users, V4's model aligns PRCL holders with protocol growth—more markets mean more utility and more value for everyone.

Fee Structure and Economic Benefits

V4's fee economics represent perhaps the most immediately tangible benefit for investors. The elimination of LP compensation costs enables the team to implement significant fee reductions and volume-based incentive structures that make real estate exposure more accessible.

LP Compensation Elimination: The largest component of current trading costs comes from compensating liquidity providers for the risks they take in providing continuous liquidity. V4 removes this cost entirely.

Volume-Based Incentives: The new architecture allows for implementation of volume-based fee tiers, similar to traditional centralized exchanges, but with a key requirement: PRCL token holding would be necessary to access these volume discounts. This creates direct utility for the token while providing additional incentives for active investors who commit to the protocol ecosystem.

This fee structure improvement makes professional real estate investing strategies much more economically viable while broadening access to liquid real estate exposure.

Risk Management and Safety

V4's risk management approach is fundamentally different from V3, focusing on structural safeguards rather than active intervention systems.

Index Price Anchoring: Oracle-based price constraints prevent bids and offers that are too far from fair value. Buyers must bid at or above the index price, while sellers must offer at or below the index price. This prevents manipulation and maintains market integrity, while all matched orders still execute at the calculated VWAP regardless of individual bid/offer levels.

Full Collateral Requirements: Every order requires full USDC collateral, eliminating liquidation risk entirely. While this removes leverage opportunities, it also removes the complexity and risk of margin management systems.

V4 Risk Mitigation and Safeguards

Beyond basic risk management, V4 includes specific safeguards designed to handle edge cases and protect users during various market conditions.

No Match Protection: When insufficient compatible orders exist, no trades execute, protecting users from forced execution at unfavorable prices. Orders remain in the orderbook for future auctions when more favorable matching conditions develop.

Extreme Price Movement Safeguards: During volatile periods, the consistent index price filtering prevents bids and offers that deviate significantly from underlying real estate values. Orders attempting to trade too far from the index price are filtered out regardless of market conditions, protecting against potentially manipulative orders while still allowing fair VWAP execution for legitimate participants within the bounds.

Acknowledging Potential Concerns

Parcl V4 recognizes that this architectural evolution may raise legitimate concerns that deserve careful consideration and open discussion. Rather than dismissing these concerns, it's important to acknowledge them as part of the collaborative evaluation process.

Liquidity and Execution Timing: Some traders may worry that 8-hour auction intervals are too restrictive for certain strategies, particularly those that rely on rapid position adjustments or continuous trading opportunities. The shift from continuous to periodic execution represents a fundamental change in how trades can be timed and executed.

Leverage Elimination: The removal of built-in leverage may concern traders who rely on leveraged strategies to amplify their real estate exposure. While full collateral requirements eliminate liquidation risk, they also require larger capital commitments for equivalent position sizes. However, future leverage capabilities could potentially be added through peripheral mechanisms that complement the core exchange without affecting its risk profile.

Market Maturation Period: Newer or smaller markets may experience periods with insufficient order flow for successful auctions, potentially creating frustrating experiences for users trying to trade less popular real estate markets.

The goal of this consultation is to understand how significant these issues are for different user segments and whether the benefits justify the trade-offs.

Seeking Community Feedback via Google Form Feedback Link

Parcl V4 invites all community members to share their perspectives on this architectural proposal through comprehensive feedback that helps the team make the most informed decision possible. The goal is collaborative problem-solving rather than simple approval or rejection.

To facilitate constructive dialogue, feedback is particularly valuable in these specific areas:

Trading Strategy Impact Analysis:

• How might the FBA system and 8-hour auction intervals affect your current trading strategies?

• What specific use cases would be most impacted by the elimination of built-in leverage (noting that future peripheral leverage mechanisms could complement the core exchange)?

• How important is continuous trading versus periodic execution for your approach?

Economic and Fee Structure Considerations:

• How significant would substantial fee reductions be for your investment activity?

• What are your thoughts on volume-based fee tiers that require PRCL token holding to access discounts?

• How do you view the trade-off between lower fees and reduced execution flexibility?

PRCL Token Utility and Market Creation:

• How do you evaluate the PRCL utility in market creation, settlement voting, and accessing volume-based fee discounts?

• What are your thoughts on the 30-day automatic settlement mechanism for inactive markets?

• What types of new residential real estate markets would you be most interested in seeing created—broad geographic areas, specific zip codes with institutional focus, neighborhoods with media attention, or other granular markets?

• Would you be interested in creating or trading bespoke markets for specific investment opportunities or areas of expertise?

Liquidity and Market Structure Concerns:

• What are your primary concerns about liquidity provision in the auction system?

• How would you want the protocol to handle low-liquidity periods or failed auctions?

• Are there modifications to the FBA system that would address your concerns?

Alternative Approaches and Implementation:

• What alternative solutions should be considered alongside or instead of this proposal?

• What timeline preferences do you have for V4 implementation if it moves forward?

• How should success metrics be defined for evaluating the new architecture?

Please provide structured feedback addressing:

• Technical concerns: Implementation details, auction mechanics, risk management

• Economic impacts: Fee benefits, trading costs, PRCL token economics

• User experience: Strategy impacts, execution preferences, interface considerations

Share your feedback through this dedicated form: Google Form Feedback Link

All perspectives, whether supportive, critical, or mixed, are valuable for making an informed decision. The goal is finding the best approach that balances innovation with practical trading needs while building a sustainable foundation for long-term protocol growth.

Timeline and Next Steps

The feedback collection period will remain open for 7 days from this post's publication, allowing sufficient time for thoughtful responses and community discussion. During this period, the Parcl development team will actively monitor feedback, engage with specific concerns, and potentially host community calls to discuss complex issues in more detail.

Following the consultation period, the team will synthesize all feedback to better understand community priorities and shape what V4 should actually look like moving forward. This input will help determine which elements of this proposal resonate most strongly, what modifications or alternatives should be explored, and how to design an architecture that best serves the community's needs.

This represents a critical decision point for the protocol's future direction. The community's input will directly influence whether V4 moves forward, what modifications might be made to address concerns, or whether alternative approaches should be explored instead. The collaborative nature of this process ensures that whatever path is chosen has strong community understanding and support.

This proposal represents a significant architectural evolution for decentralized real estate investing. Your thoughtful feedback will help determine whether V4's revolutionary approach to eliminating excessive LP losses from trading strategies that take advantage of market predictability through Frequent Batch Auctions represents the right solution for the protocol's long-term growth and sustainability.