DOWNGRAPES LITEPAPER v0.0.

Abstract
- Brief overview of the downGrapes project and the IAP

Introduction
- Background on NFT auctions and issues around speculation
- Explanation of incentivized auctions
- Overview of downGrapes and the need for IAP

The Incentivized Auction Protocol (IAP)

- How it works:
- When a bidder is outbid, the bid increment amount is split:
- 50% to community DAO pool
- 50% to the outbid bidder
- Creates incentives for genuine bidding and community
rewards
- Benefits:
- Promotes fairer distribution
- Community rewards from bid pool

Implementation
- Initial launch will be at the project level for downGrapes
auctions - Long term goals are to:
- Develop protocol level version of IAP
- Create easy to use deployer UI
- Build marketplace for incentivized auctions
- Technical details on integration to downGrapes
marketplace
- Wallet requirements
- User flowcharts

Applications and Future Possibilities

- Wider applications beyond downGrapes
- Roadmap for growth

Conclusions
- Summary of how IAP solves key issues
- Vision for the future with successful
implementation
Abstract

The downGrapes project was originally conceived as an art-focused NFT collection. However, A developer (Emer)
approached the founder (Sn34ky) with the idea for an Incentivized Auction Protocol (IAP). Recognizing the
potential of IAP, the downGrapes project made the decision to pivot and implement IAP for their NFT auctions.

IAP is designed to encourage speculative bidding and promote fairer distribution of NFTs compared to traditional
auction models. It accomplishes this by providing bidding incentives and community rewards. When an active
bidder is outbid, a portion of the bid increment will be split, - 50% goes to the outbid bidder and 50% goes to the
community DAO pool.

By aligning incentives, IAP fosters genuine interest in the NFTs from buyers and provides rewards for the
community. The downGrapes project will be the first to implement IAP, porting the protocol initially from Solidity
to Rust. IAP has the potential to solve issues in NFT auctions and transform distribution models.

Introduction

Non-fungible tokens (NFTs) have exploded in popularity recently as a way to represent ownership of
digital artwork and other collectibles. However, current NFT auction models have some known issues
that lead to unfair distribution and speculative bidding where only wealthy buyers can participate.

The downGrapes project aims to be an inclusive NFT community centered around Pixel artwork. To
promote fair distribution and active engagement, downGrapes will be implementing the Incentivized
Auction Protocol (IAP) for its NFT drops.

IAP provides new incentives that encourage genuine bidding behavior and community rewards. When an
active bidder gets outbid, a portion of the bid increase gets split between the outbid bidder and a
community DAO pool. This helps deter speculative bidding since bidders are directly compensated for
their efforts. The community also benefits from rewards accrued in the bid pool.

Fresh incentives and competitive bidding dynamics are needed in the NFT space. IAP has the potential to
solve common issues around fair distribution, speculation, and barriers to participation. The
downGrapes project will pioneer the implementation of IAP to foster a vibrant and engaged community.
The Incentivized Auction Protocol (IAP)

The key innovation in IAP is incentivizing competitive bidding by rewarding both the bidder and the
community when bids are placed. Here is how it works:

- When an active bidder is outbid, the amount of the bid increase is split:
- 50% of the increase goes to the outbid bidder
- The other 50% goes to the community DAO pool

- This creates financial incentives for bidders to actively participate and bid competitively. Even if they
get outbid, they will receive a portion of the bid increase.

- The community DAO pool accumulates rewards with each new bid. This pool can be used for purposes
that benefit the community.

The end result is a fairer distribution model where the most engaged bidders get rewarded, rather than
just the top bidders. The community also gains resources to nurture its growth and development.

Implementation

The downGrapes project will pioneer the implementation of IAP, bringing the protocol to life for the first time.

Initial Launch

- IAP will launch with the a downGrapes NFT 1/1 drop series.

- The downGrapes dev team is porting the core IAP smart contracts from Solidity to Rust to deploy them on
their chosen blockchain.

- Specific auction parameters like the bid increment percentage and pool distribution ratios will be
configurable per auction.

- The team will release documentation explaining the bidding and incentive flows in detail, with visual
diagrams and examples. This will come in the whitepaper shortly after the initial AMA and Community voting.
FUTURE GOALS

- After proving successful at launch, work will begin on a more generalized protocol-level version of
IAP that others can leverage.

- An easy-to-use interface will lower barriers for other projects to deploy IAP for their auctions.

- Finally, a standalone marketplace for IAP auctions will provide a hub for the wider NFT community.

By executing in phases, the downGrapes team can gain valuable data and feedback to improve IAP
and expand its potential at scale.

APPLICATIONS AND FUTURE POSSIBILITIES

The Incentivized Auction Protocol has the potential to transform NFT auctions and ownership models.
While launching first for downGrapes, IAP can expand to empower many more communities over time.

Some possible future applications include:

- Other NFT projects can adopt IAP to align incentives and reengage their communities. Both new projects and
established ones can benefit.

- The art community specifically may be drawn to IAP as it democratizes access and provides resources back to
artists.

- Gaming NFTs and metaverse assets are another area ripe for IAP adoption. It adds compelling competition and
value distribution mechanisms.

- For physical product drops, IAP queues could form waiting lists where members get rewarded the longer they
wait. This creates equitable virtual lines.

- Ticket sales for events could leverage IAP to eliminate scalpers and get tickets to the most engaged fans first.
The competition becomes about fandom rather than wealth.

As IAP sees more use cases, the team plans to steadily improve and evolve
the protocol. Some future possibilities include:

- Experimenting with different incentive and pool distribution ratios

- Adding tiered reward levels and referral bonuses

- Integrating queue-based "waiting rooms" for hyped launches

- Allowing bidding groups/DAOs to participate collectively in auctions

The potential for IAP to transform engagement incentives and ownership distribution is immense.
Both the downGrapes team and the community will shape that future together.
Conclusions

The Incentivized Auction Protocol represents a major step forward for NFT auction
models and community engagement. By realigning incentives around competitive
bidding and community rewards, IAP helps solve endemic issues in NFT distribution.

IAP discourages insincere bidding by rewarding genuine participation, even when a bidder
gets outbid. The community also gains resources to nurture its growth through the public bid
pool. This results in fairer access and more inclusive participation beyond just the wealthy few.

The downGrapes project will lead the way in implementing IAP for its NFT drops.
Learnings and data will be used to improve IAP over time and expand its reach.
The team envisions IAP becoming a standard for NFT projects and possibly
other use cases like event tickets and product releases.

At its core, IAP transforms the competitive bidding process from a purely financial
exercise into one focused on community engagement. The most passionate and
dedicated members can gain access, not just those with the deepest pockets.

The result is a revitalized model that incentivizes participation, discourages speculation,

and benefits the entire community. As IAP continues to evolve, it promises to unlock new
possibilities for equitable distribution and access. The downGrapes project is excited to
spearhead this evolution and set a new standard for community-focused NFT auctions.