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There are three auction types in the dai system, the collateral auction (flip-auction), the debt auction (flop-auction) and the surplus auction (flap-auction). Flap and Flop auctions are initiated by the Vow. Collateral auctions are initiated by the Cat.
Flap is the simplest of the auctions, where surplus Dai is sold for MKR. Bidders complete for lot amount of Dai with increasing bid amounts of MKR.
Sell (mint) MKR for Dai.
Bidders complete for bid amount of Dai with decreasing lot amounts of MKR.
Sell (liquidated) Gem for Dai
In the tend phase bidders compete for increasing amounts (bid) of Gem. Once tab amount of Dai has been raised the auction moves to the dent phase. In the dent phase bidders can compete for decreasing amounts (lot) of Gem for tab amount of Dai.
