# Overview

ZAP is a **token auction protocol** — a transparent, time-limited sale where the price is determined by real market demand and every winner pays the same fair price.

As a participant, you lock up funding currency, state the maximum price you're willing to pay, and let the auction do the rest. The rules are fixed on-chain and cannot be changed by anyone once the auction starts.

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### What you do as a bidder

You lock up your funding currency and specify a **maximum price** you are willing to pay per token. Your funds are held in the smart contract — safely escrowed — until the auction ends. You can watch the clearing price evolve in real time, and your bid stays active as long as the clearing price stays at or below your stated maximum.

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### What happens during an auction

1. **The auction opens** — the full token supply is locked in the contract and bidding begins.
2. **You place a bid** — specify an amount of funding currency and the maximum price per token you'll accept.
3. **Tokens are released gradually** over the auction's duration according to a fixed schedule (see Supply Progress).
4. **A clearing price emerges** continuously from demand in the system (see Fair Price). This is the single uniform price everyone will pay.
5. **The auction closes** at a fixed block — no more bids can be placed.
6. **You exit your position** — the contract calculates your token allocation and any currency refund due.
7. **You claim your tokens** once a short waiting period after the auction ends has passed.

If the auction does not raise enough funding to meet its soft cap, it is considered **failed** and all bidders receive a full refund. See Failed Auction.

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### How tokens and funds flow

```
Auction contract  (holds all tokens + funds for the full duration)
    ▲
    │  you lock funding currency when you bid
    │
[You]  [Bidder B]  [Bidder C]  ...

After auction ends (if graduated — soft cap met):
    └── tokens → you, via claim
    └── any unspent currency → you, via exit

After auction ends (if failed — soft cap not met):
    └── your full funding currency → you, via exit
```

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### Key concepts at a glance

| Term               | Plain English                                                                                               |
| ------------------ | ----------------------------------------------------------------------------------------------------------- |
| **Bid**            | Your commitment to buy tokens up to a stated max price, with a locked amount of funding currency            |
| **Clearing price** | The single uniform price all winning bidders pay — determined entirely by market demand                     |
| **Floor price**    | The minimum possible clearing price — it can never go lower                                                 |
| **Soft cap**       | The minimum total raise required for the auction to succeed and tokens to be distributed                    |
| **Graduation**     | The auction has raised at or above the soft cap — it's a success                                            |
| **Exit**           | Settling your bid after the auction ends: you receive your token allocation and any unspent currency refund |
| **Claim**          | Transferring your allocated tokens to your wallet after the claim period begins                             |

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> Next: [Auction Timeline](https://zealous-auctions.gitbook.io/zealous-auctions-docs/protocol/auction-timeline) — walk through each phase of the auction and what you can do at each stage.
