↗️Catalyst Bonding Curve

Catalyst uses a price curve that defines the relationship between the price and supply of a token. In Catalyst, this mechanism ensures dynamic pricing and transparent funding for projects. Here's an in-depth look at how this works.

Key Features of the Bonding Curve

1. How are IPTokens priced:

• The bonding curve establishes a direct relation between the token's supply and its price.

• As more tokens are minted (supply increases), the price rises.

• Conversely, when the contribution is withdrawn (supply decreases) during the funding period, the price per token falls.

2. Initial Token Offering:

• At the start of a project, tokens are offered at a lower price.

• This incentivizes early contributors by allowing them to purchase tokens cheaply, encouraging early support and funding.

3. Dynamic Pricing:

• The bonding curve adjusts token prices in real-time based on current supply and demand.

• The unidirectional, functional pricing model allows users to contribute at a predictable price increase and also comes with a built-in slippage protection.

4. Incentives for Participation:

• Early participants benefit from lower initial token prices.

• As the project progresses and more tokens are minted, the price of the tokens increases, rewarding early backers.

5. Summary: Benefits of the Bonding Curve

• Fair Pricing: Ensures that token prices are fair and reflective of actual demand.

• Incentivizes Early Support: Rewards early backers with lower token prices.

• Liquidity Provision: Maintains liquidity, allowing tokens to be bought and sold easily.

• Predictable Funding: Provides a predictable and transparent funding mechanism for projects.

By leveraging a bonding curve, Catalyst creates a dynamic and fair environment for funding innovative projects.