A bonding curve is a smart contract that automatically mints and un-mints tokens according to predefined rules.
Ideamarket's bonding curve mints new tokens while maintaining a constant relationship between circulating supply and price. The first 1000 tokens for any listing cost $0.10 each, and the price increases by $0.01 per 100 new tokens after that.
While token supply is infinite in theory, the bonding curve ensures the price maintains a constant relationship to circulating supply.
Our bonding curve achieves a few important goals:
- 1.Provides liquidity. The bonding curve always has more tokens for sale, and will always "buy back" the tokens you sell at their current price.
- 2.Provides a level playing field. The bonding curve specifications are the same for all tokens on Ideamarket.
- 3.Prevents short-selling. Given that price is a function of circulating supply, short-selling cannot affect the price, because short-selling can't artificially reduce circulating supply.
Below is a document describing the bonding curve math as used by Ideamarket in detail:
Bonding Curve Math