Gov/en/Portal:R&D/Innovations:Bonding Curve

💡 In simple words: Think of the very first people who chip in to build something new — they take the biggest chance, so they get the best reward. The Bonding Curve is the clear, public math rule that gives early supporters more Credits per franc, with no guessing and no secret deals.

Wiki Core · Concept

The Bonding Curve

Bonding Curve at a Glance

Type	Transparent algorithm
Purpose	Credit generation from funding
Speculation	❌ None
Backed by	Real expenses + subscriptions
Expert review	Open Calls (math experts)
Early multiplier	Up to ×100
Growth multiplier	~×30 at mid-stage
See also	Rewards Explained
See also	Why Fund WikiDeal

The bonding curve is the core algorithm that converts funding contributions into Credits. It is a transparent, defined algorithm — not frozen (it can be updated through Open Calls with mathematical experts). Updates apply prospectively only: they never reduce rights already attributed at the moment of a contribution, but consistent and publicly documented. It ensures that early funders are rewarded for taking on the highest risk.

The bonding curve ensures early funders receive more Credits per CHF — recognizing the risk they take when the platform is unproven.

How the Bonding Curve Works

The bonding curve relates the current funding reserve level to the Credits generated per CHF contributed. The key principle: as the reserve grows, each CHF generates fewer Credits. This rewards early participants and creates a natural, non-speculative incentive to fund early.

The Mathematical Formula

Credits(CHF) = CHF × multiplier(R) Where multiplier(R) is a decreasing function of Reserve R: multiplier(R) = M_max × e^(-k × R) M_max = maximum multiplier (at R=0, e.g. ×100) k = decay constant (determines how fast multiplier drops) R = current reserve level (total CHF in fund) e = Euler's number (≈ 2.718...) Example at R=0 (first funder): CHF 1 → 100 Credits Example at R=50,000 CHF (mid-stage): CHF 1 → ~30 Credits Example at R=500,000 CHF (growth stage): CHF 1 → ~5–8 Credits

⚠️ This calculation will be discussed in Open Calls by mathematical experts. The exact constants (M_max, k) are subject to community review and may be adjusted through the Open Call process.

Text-Based Visualization

The relationship between reserve and multiplier (illustrative):

Reserve (CHF) │ Multiplier (Credits per CHF) ───────────────┼────────────────────────────── 0 │ ×100 ██████████████████████████ 5,000 │ ×80 ████████████████████ 20,000 │ ×50 █████████████ 50,000 │ ×30 ████████ 100,000 │ ×15 ████ 300,000 │ ×6 ██ 500,000+ │ ×2–5 █

Why a Bonding Curve?

The bonding curve solves a fundamental bootstrapping problem: how do you reward early funders fairly without creating speculation or securities law issues?

• Early funders take the highest risk (platform unproven) → receive highest multiplier
• Later funders take less risk (platform established) → receive lower multiplier
• No external market price needed — the algorithm is self-contained
• No speculation: Credits are not tradeable on open markets
• Transparent: everyone can see the curve and calculate their Credits

Relation to Rewards and Karma tokens

The bonding curve determines the total Credits generated. The Need-Driven Funding then determines how those Credits are split between Rewards (personal, P2) and the community pool. The bonding curve itself does not determine the Cash/Karma-token ratio — that is the Need-Driven Funding mechanism's job.

Transparency Commitment

WikiDeal commits to publishing the full bonding curve formula, constants, and historical data. Community members can verify their Credit calculations independently. The formula is defined — not opaque — and any changes must go through an Open Call process with mathematical expert review.

See also: Rewards Explained Rewards Karma tokens Need-Driven Funding Why Fund WikiDeal Open Call Guide

💡 Improve this concept — submit a proposal via Open Call