Vow
, Flop
, and Flap
contracts.Vow
represents the overall Maker Protocol's balance (both system surplus and system debt). The purpose of the vow
is to cover deficits via debt auctions and discharge surpluses via surplus auctions.Flopper
(Debt Auction) is used to get rid of the Vow
’s debt by auctioning off MKR for a fixed amount of internal system Dai. When flop
auctions are kicked off, bidders compete with decreasing bids of MKR. After the auction settlement, the Flopper sends received internal Dai to the Vow
in order to cancel out its debt. Lastly, the Flopper mints the MKR for the winning bidder.Flapper
(Surplus Auction) is used to get rid of the Vow
’s surplus by auctioning off a fixed amount of internal Dai for MKR. When flap
auctions are kicked off, bidders compete with increasing amounts of MKR. After auction settlement, the Flapper burns the winning MKR bid and sends internal DAI to the winning bidder.Vow
, Flop
and Flap
contracts help the MCD system operate?Sin
(the total debt in the queue). It sells an amount of minted MKR and purchases Dai that will be canceled 1-to-1 with Sin
.Vow
while users bid with MKR, which will be burned, thus reducing the overall MKR supply. It will sell a fixed amount of Dai to purchase and burn MKR.flip
, flop
, and flap
).dent
phase since they could return too much collateral to the original CDP and end up overpaying (i.e. pay too much Dai (bid
) for too few gems (lot
)).Flip
and Flap
auctions, the tick
function will restart an auction if there have been 0 bids and the original end
has passed.Flop
auction expiring without receiving any bids, anyone can restart the auction by calling tick
. Along with restarting the auction, it also includes a necessary increase of the initial lot
size by pad
(default to 50%). This extra process is because the lack of bidding for the lot
could be due market circumstances, where the lot
value is too low and is no longer enough for recovering the bid
amount.beg
Bid.end
being hit before the "true" price was found.ttl
tau
Bid.tic
.ttl
) has passed. Hence, in the case when extreme network congestion occurs, ttl
and auctions are affected because they can take longer than three hours to confirm a transaction. Therefore, due to Ethereum network congestion, this can result in auctions settling for less than the fair market value. Due to this potential issue, bidders need to calculate network congestion risks when making bids.