🤖Fantech bonding curve
An exponential bonding curve model is implemented in Fan.tech system to determine the relationship between the price and supply of tokens (for our case, they are called shares).
Once the initial price is determined through the shares generation event (SGE), users can purchase shares at the price listed on the bonding curve using collateral in Mantle (MNT). The bonding curve's value estimate of the token is determined through token minting (purchase) and burning (sale). As the supply of bonding curve tokens changes through minting and burning, it impacts the value listed by the bonding curve. Benefits of bonding curves ✅ Liquidity: Bonding curves ensure constant liquidity. The contract itself acts as a market maker, allowing buyers and sellers to trade without waiting for a counterparty. Furthermore 1% of the sales tax is added back to the liquidity pool.
✅ Price predictability: The shape of the bonding curve is known in advance and cannot be changed. This adds a layer of predictability as participants can anticipate how changes in supply will affect the price.
✅ Fair Distribution: Our SGE in combination with the bonding curve for initial shares distribution can be considered a fair launch method, as the price starts at the lowest possible point.
✅ Fundraising: The area under the curve represents the pool of funds held by the smart contract. As more tokens are purchased, more funds are locked in the contract, which can be used for project development.
✅ Stable Floors: Bonding curves can create intrinsic value for a token. Tokens can always be redeemed at the current price point on the curve, providing a built-in price floor.
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