GEN.ART :GIP 002 Refinement of the way in which Dutch Auction (DA) Rewards are Allocated

Introduction

After analysis from the GIP-001 design stage, some improvements to the way DA rewards are allocated have been identified. This proposal outlines a revised method. It is not intended to alter, or replace, the spirit, or positive aspects of GIP-001, such as the implementation of DAs and staking, but purely add a refinement to the way DA rewards should be allocated.

Proposal Background

In GIP-001 the DA rewards pool is described as follows

“The DA Reward pool is intended to reward members who participate in the early phases of a DA drop. The proceeds of mints which were minted above the resulting average price of an auction are distributed back to those early minters. The reward shares are weighted based on how much ETH stakers spend on the DA and how much $GENART tokens they combined with their Memberships stake. Stake must be active during the DA’s timeframe (block range).

Conditions: Amount of ETH spent on minting the drop $GENART + Memberships stake Must be staked during the drop’s block range (timeframe)

Rewards: Depending on the resulting average price of a DA the total amount of rewards is calculated as follows: Dutch auction calculator & Staking rewards GEN.ART”

Proposal

To simplify the calculation, make it easy to understand, and explain, and make refunds available to all, It is proposed that the DA reward pool be claimable by addresses that participate in the mint at phases above the average mint price of a collection. The amount of refund simply being the amounts that have been paid over the average mint price of the collection in each phase.

Example

Assume there are 4 phases in an auction with prices 1 ETH, 0.8 ETH, 0.64ETH and 0.5ETH and that an address mints two in each phase.

Secondly, assume that the average price paid overall is 0.6ETH then the address will be able to claim:-

(1-0.6)*2 = 0.8ETH back from phase 1 mint (0.8-0.6)*2 = 0.4 ETH back from phase 2 mint (0.64-0.6)*2 = 0.08 ETH back from phase 3 mint

Total claimable refund for the address of 1.28ETH There is no refund from phase 4 as this was under the average mint price.

Development cost

This proposal is consistent with implementation that has been coded at this stage and will incur minimal further explicit development costs and/or time.