I read everyone's replies and here's what I think:



I like @TailedThief 's idea for this one. Everyone's bids gets taken until the auction ends. Seems the most fair solution!



I think a period of 24 or 48 hours would be better (1 day or 2 days) to adjust to everyone's schedules. Then again, that depends on the auction's time. Auctions that take 1 or 2 days would have a lower grace period to withdraw. I think the snipeguard is a good example of how this could be implemented.



If someone is the only bidder, they wouldn't get the option to cancel. This would help avoid stressful situations for both parties.



Toggleable notifications would be the best way to go about this! If the seller wants to know who's the most recent bid they can look at their auction on the Market Watch page.



Agreed!



Agreed as well!



I like the idea of a cooldown!

I think the best way to approach this would be to let the parties involved (sellers and bidders) know about how the withdrawing works.

For sellers, it'd be something like a text box saying the bidders can withdraw their bids and the time frame they can, and how the money would be handled during these movements.
For bidders, it'd tell them they can withdraw their bid within a certain time limit and about the cooldown they'll be facing if they choose to withdraw the bid.

Specifically for bidders, I think it'd be nice to show this possibility before they place a bid, rather than showing it when they're going to withdraw. They'll have more information to make better decisions that way.

All of this is open to discussion! Thanks for listening :)