Gov/en/Portal:R&D/Innovations:Bonding Curve: Difference between revisions

{{KidsIntro|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.}}

| Credit generation from funding

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 [[Gov/en/Portal:R&D/Open-Call:Main|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.

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.

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

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 █

* 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

The bonding curve determines the ''total'' Credits generated. The [[Gov/en/Portal:R&D/Innovations:Need-Driven Funding|Need-Driven Funding]] then determines how those Credits are split between [[Gov/en/Portal:Economy/Rewards|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.

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.