its basically like NIP 28, but with a shared secret that is given to all participants using direct messages. here is an overview: https://github.com/vishalxl/nips/blob/master/38.md

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I would suggest not using kind4 for invites, it should be a new kind that clients can handle separately instead of detecting it in a DM

yes, ideally should have some other kind for such private messages related to apps, that others can also use. will keep that in mind long term...