Bonding curves are built upon one of the most fundamental concepts in economics: price being a function of supply and demand. This tried and tested economic law is the complex study of a more familiar adage: an asset is only worth what someone is willing to pay for it. The core concept of a bonding curve is quite simple: The price of a token is determined by its supply. The more tokens that have been distributed, the higher the price. Bonding curves allow for a fix and predetermined price discovery mechanism, that is set in blockchain stone and cannot be cheated. Every minter needs to deposit some amount to mint spcific amount of tokens and next minter will pay more amount the previsou minter. Same for the bunner, if a user wants to burn his tokens, he can burn and get repective amount of tokens from pool. The price of each token is defined by the curve / formula itself, every market participant knows exactly how much each token will cost at any given time. As tokens have the lowest price at the lowest part of the curve, there is a price advantage for early adopters.
This is the method, which will provide you that how much about you have to pay for a specific amount of token, that you want to mint on your account.
getMintPrice = (amount) => {
amount = +amount;
let supply = this.totalSupply;
let newSupply = supply + +amount;
let reserve = this.reserve;
return supply === 0 ?
(this.slope * amount * amount) / 2 / 1e4
:
(((reserve * newSupply * newSupply) / (supply * supply)) - reserve);
}
This is the method, which will provide you that how much amount you will get if you burn that specific amount of tokens.
getBurnPrice = (amount) => {
amount = +amount;
let supply = this.totalSupply;
let newSupply = supply - +amount;
let reserve = this.reserve;
return reserve - ((reserve * newSupply * newSupply) / (supply * supply));
}
This method, will get fiat or reserved-token amount from you and mint tokens on your account. Once tokens are minted it will increament the reserve tokens in pool, total supply of token, distribute fee to among multiple parties.
mintToken = (amount, fusdAmount) => {
amount = +amount;
fusdAmount = +fusdAmount;
let mintPrice = this.getMintPrice(amount);
let supply = this.totalSupply;
let fees = this.distributeFee(fusdAmount);
this.reserve += mintPrice - fees;
this.userBlance -= +fusdAmount;
this.userTokenBalance += amount;
this.totalSupply += amount;
};
This method, will get token amount from you which you want to burn and send you reserved-token to your account according to bounding curve. Once tokens are burned it will withdraw the tokens from pool, decrement total supply of token and deposite fiat or reserve-token amount to your account. In this method, we don't need to charge any fee.
burnToken = (amount) => {
amount = +amount;
let supply = this.totalSupply;
let burnPrice = this.getBurnPrice(amount);
this.reserve -= burnPrice;
this.userBlance += burnPrice;
this.userTokenBalance -= +amount;
this.totalSupply -= amount;
}
We already deployed our code using firebase hosting, so if you want to test our application you can review that easily. Also we provide input options to so any user can update variable accordingly and verify his bounding curve graph. In addition, we have provide minting and burning graph too, with specific token amount with a series minting and burning, so you can verify our formula and review the graph.
Here is the link of the our sample-site Sample Code
If there is any issue with site, you can see bellow images to get idea of Bounding curve.
It is the main graph, in which you can set variable like mintTokens, burnTokens, totalSupply and verify your bouding curve graph.
Here is the complete minting and burning graph, which are generated on a specific max-supply. In minting graph, we are minting tokens in ascending order untill max-supply is not reached and in burning graph, we are burning tokens gradually with some difference untill all minted tokens are not burrned. For more details you can visit our Sample Code.
