Bonding curves

Bonding Curves is a pricing model for crypto assets that establishes a relationship between the price of an asset and its supply based on supply and demand. Specifically, Bonding Curves associate the price of an asset with a curve, typically called the "buying curve," which changes as the supply of the asset changes. When someone buys a certain amount of the asset, the supply decreases and the price increases accordingly. Conversely, when someone sells a certain amount of the asset, the supply increases and the price decreases. The advantage of the Bonding Curves model is that it can provide liquidity and price discovery mechanisms for digital assets.

The constant product formula X*Y=K in Uniswap V1's AMM trading mechanism in the DeFi field is a type of Bonding Curves model. In the NFTFi field, the linear curve, exponential curve, and XYK curve used in Sudoswap's NFT liquidity construction are also Bonding Curves models based on different asset categories and trading patterns. The application of Bonding Curves is not limited to the DeFi market and can also be used in prediction markets, curation markets, and crypto gaming markets.

In past games, players were in a passive position regarding in-game items. However, Bonding Curves, based on mathematical functions, can link the price of tokens to their supply. In crypto games, this mechanism can be used to create various types of game assets and provide players with a more transparent and secure gaming experience:

  1. Creating crypto game assets with variable supply: Bonding Curves can be used to create game assets with variable supply, such as items, resources, or virtual currencies. This mechanism can make the price of game assets change as the supply changes, which is conducive to promoting fairness and better assisting in stabilizing and promoting the development of a free market economy. Does AMPL or OHM come to mind?

  2. Support the design of game economic models: Using Bonding Curves to support various types of game economic models can connect various inflation models, deflation models, or stablecoin mechanisms, just like the combination of smart contracts. This mechanism can bring more flexible and scalable economic models to game developers and can be adjusted according to the needs of the game. Does Fomo3D come to mind? Then you must be a crypto OG!

  3. Increase the liquidity of game assets: Bonding Curves can help increase the liquidity of game assets, making it easier for players to trade and exchange game assets. This mechanism can bring a more active economic system to crypto games and provide players with more trading and exchange opportunities. It can also increase players' confidence and trust in game assets.

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