@MSwezey links an interesting article, but I think this is the most important highlight:
After the 72-hours are up, everyone who bid on that domain must reveal the value of their bid within 48 hours or else they will lose the entire value of their bid.
I haven't run the numbers yet, but I'd bet on this being the higher contributor to the dead ether than the 0.5% burn.
If you hang out in the gitter channel, (or more importantly, were there during the first name rush), you would see that losing the whole bid was surprisingly common. In roughly descending order, people:
- Lost their password
- Didn't understand that they had to reveal even if they lost the auction
- Got delayed, distracted
- Forgot what name they bid on
- Got caught in an ICO gas price escalation
- Lost their keyfile / other computer failures
- Had to resync their chain, couldn't complete it in time
- Set the name owner as someone other than the bidding account during the bid, making the bid unrecoverable (maybe that was only me :P -- I hope so, because I tried to make the docs better than I found them)
All of these things caused people to lose the entirety of their bids. Especially painful is that people bid very high, thinking it was safe: that the "worst case" was that they could get their ether back in a year. They learned a tough lesson that the worst case was losing the full bid. (losing more than the winning bidder paid, even!)
I'm highly in favor of dramatically increasing the reveal period in the next iteration, to at least a week or two. I don't think I've convinced the maintainers of that though, most importantly: Nick Johnson*.
* Nick does amazing work. When he disagrees with me, I tend to wonder if I'm wrong. Although I think I'm right this time :P