📈Bonding Curve Dilemma

Innovating on Social-Fi's bonding curves

Bit Holders benefit from the earnings that their respective Gamers generate. Top skilled gamers are dropped token rewards from the Victory Pool, which holds a significant amount of overall protocol fees. If you are a Bit Holder of a top skilled player, you get a portion of their ecosystem rewards as well.

One similarity of Bits that readers will undoubtedly notice is that SocialFi platforms have popularised the concept of keys or shares, in which users can buy the keys of their favourite influencer which also follows a bonding curve formula. Below is how we're iterated and improved on the economics of social-fi experiments that have not panned out at scale:

  1. Steepness and Growth: As we reward early adopters who prove themselves as able to identify great potential in players' skills, the bond curve dictates larger growth rates in early stages of the Bit supply while not being too aggressive. As such the growth starts between 50-100% for the first two key holders, while tapering down to less than 10% after the supply for a specific player exceeds 15 Bits.

  2. Dynamic Pricing Structure: The starting price of Bits adjusts dynamically based on the protocol activity; specifically it is contingent on the total Bits volume traded (denoted in ELS volume traded). This allows for the ecosystem to cool down, as high-volume weeks will increase the starting Bit price for new gamers higher, therefore slightly curbing a potential frenzy. Likewise, if volume has been modest over the past week, the following week's starting Bit prices will be lower, making it more affordable for Bit Holders to purchase keys of new gamers.

  3. Revenue Sharing Model: Holders of Bits will share in the revenue generated by their gamers in a transparent and equitable manner. A predetermined percentage of the earnings from the gamers will be distributed to the Bit Holders, incentivising the support and growth of talented gamers.

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