Gov/en/Portal:Economy/Bonding-Curve: Difference between revisions

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~~'''Bonding Curve''' — WikiDeal governance~~.

{{KidsIntro|A bonding curve is a rule that decides the price based on how many people join. When more people take part, the price changes in a clear, predictable way written down in advance.}}

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~~''Reference language: English. Starter page — content to be expanded.''~~

Wiki Core · Concept

See also: [[Gov/en/Portal:Economy/Main|Economy]]

== The Bonding Curve ==

Bonding Curve at a Glance

{| class="wikitable"

|-

| Type

| Transparent algorithm

|-

| Purpose

| Credit generation from funding

|-

| Speculation

| ❌ None

|-

| Backed by

| Real expenses + subscriptions

|-

| Expert review

| [[Gov/en/Portal:R&D/Open-Call:Main|Open Call]]s (math experts)

|-

| Early multiplier

| Up to ×100

|-

| Growth multiplier

| ~×30 at mid-stage

|-

| See also

| [[Gov/en/Portal:Economy/Cash-Rewards|Rewards Explained]]

|-

| See also

| [[Gov/en/Portal:Economy/Main|Why Fund WikiDeal]]

|}

The bonding curve is the core algorithm that converts funding contributions into Credits. It is a '''transparent, defined algorithm''' — not immutable (it can be updated through [[Gov/en/Portal:R&D/Open-Call:Main|Open Calls]] with mathematical experts), 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 [[Gov/en/Portal:Economy/Cash-Rewards|Cash Rewards]] and [[Gov/en/Portal:Economy/Miles-Credits|Miles Credits]] ===

The bonding curve determines the ''total'' Credits generated. The [[Gov/en/Portal:R&D/Innovations:Funding Stabilizer|Balance Boost]] then determines how those Credits are split between [[Gov/en/Portal:Economy/Cash-Rewards|Cash Rewards]] (personal, P2) and the community pool. The bonding curve itself does not determine the Cash/Miles ratio — that is the Boost'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:''' [[Gov/en/Portal:Economy/Cash-Rewards|Rewards Explained]] [[Gov/en/Portal:Economy/Cash-Rewards|Cash Rewards]] [[Gov/en/Portal:Economy/Miles-Credits|Miles Credits]] [[Gov/en/Portal:R&D/Innovations:Funding Stabilizer|Balance Boost]] [[Gov/en/Portal:Economy/Main|Why Fund WikiDeal]] [[Gov/en/Portal:R&D/Open-Call:Main|Open Call Guide]]

💡 '''Improve this concept''' — submit a proposal via [[Gov/en/Portal:R&D/Open-Call:Main|Open Call]]