Augmented Bonding Curve

An Augmented Bonding Curve (ABC) is an advanced financial instrument used in decentralized finance (DeFi) to facilitate the creation and management of token economies. It combines the principles of bonding curves with additional mechanisms to ensure more robust and sustainable ecosystems. The implementation is located here: cw-abc.

Inspiration

Transition from Membership to Token-Based DAO

Initially, the Arena DAO will operate as a membership-based organization focusing on building a strong community foundation and setting the groundwork for our decentralized governance. As we grow, the DAO will transition into a token-based model using the ABC. This transition will allow the DAO to automate token supply management effectively and align incentives between the DAO and its early contributors. Only contributors will be allowed to participate in the hatch phase.

ABC Configuration

The ARENA token will be capped at 100m supply in a square-root curve with USDC.

  • The DAO pledges to create external liquidity after raising $100k through the ABC.

  • The external liquidity will be set up if not already existing with 1k USDC <> 1m ARENA on an AMM to coincide with the estimated price of the ABC.

  • $100k of the ABC funding will be pledged to provide liquidity mining incentives to the USD-ARENA pool for a year.

Hatch Phase

In the hatch phase, hatchers will only be able to buy tokens without friction. Each user will have a limit according to their hatch configuration. The hatch phase ends after a raise of 7k USDC (subject to change).

  • The founder will buy 1st with a limit of 5k USDC

  • Contributors will then be allowed to buy within their limits

Open Phase

In the open phase, anyone can buy or sell the token.

  • An entry fee of 85% will be applied to directly fund the DAO's treasury

  • No exit fee will be applied

Closed Phase

In the closed phase, users can only sell into the curve without friction. This is not on the roadmap for now, but it can serve as a complete liquidation of the token through the ABC.

ABC Visualized

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