Merkato is a unique way to obtain bandwidth, on demand, at
fair and equitable prices.
There are two ways to purchase bandwidth in a Merkato
system.
The first method is called the Reservation market. the
second method is called the Spot market.
Agents are programs within Merkato that interact on behalf
of buyers and sellers. Buyers of bandwidth configure their agents with the price
they are willing to pay for a range of available quantity. The seller configures
an agent with a quantity of bandwidth for sale and a minimum price for that
quantity. Buyer agents then express what they are willing to pay for bandwidth
in the form of bids, consisting of a unit price and a quantity. The bids go to a
third type of agent, the Resource agent.
Sellers create a price floor by offering to purchase all
the available bandwidth at their lowest acceptable price.
The entire process takes no more than five minutes. The auction is completely open and fair, with all bidders seeing what the other bidders have offered. The Progressive Second Price auction mechanism ensures that all bidders receive their allocation at the fair market price, which is equal to or less than the price they offer.