⚔️ The Challenge: Sustained bear markets have been a huge challenge for token valuations, with many DAOs and organizations seeing massive selloffs and price drops in the 90%+ range. When token price is a primary driver of the capacity to carry out work in a DAO ecosystem, volatile token prices are a hindrance to production in Web3 organizations.

🚦The Opportunity: Using bonding curves as a continuous token issuance mechanism, organizations or communities can leverage algorithmic reserve and liquidity management strategies to provide volatility-damped token price fluctuations. The Token Engineering Commons Augmented Bonding Curve is a prime example of this, outperforming ETH through the bear market. This should be studied and exemplified in order to broaden education on these tools, and establish connections with organizations who need help designing and deploying them, which could also serve as revenue streams for further work and research.

💪 Seizing the Opportunity: This research group will provide research, development, education, and application of Bonding Curves in their various forms. This research body and content deliverables will attract new talent and interest in the field of Token Engineering, and it will additionally allow for a common understanding and language around bonding curves and their applications to DAOs, businesses, finance, and economics in general. This research could offer improvements for understanding the design and ongoing operation of these new economic mechanisms, benefiting the field of Token Engineering directly through upgraded tools like dashboards and simulators, but also indirectly through networking and deal flow.

Bonding curves are an emergent, Web3 native, economic primitive that redefine markets and liquidity. By determining price as proportional to supply, liquidity can be built into an economy, ending the era of market crunches, and enabling transparent and discoverable market prices for assets. The research, development and education in token economic primitives like bonding curves and cutting-edge research in the TE field has profound potential and implications for our economic systems.

⤴️ Overview of Bonding Curves: Bonding curves are an interesting new tool in the Web3 space, which can provide various automated dealer functions that tie two or more elements of a system together through mathematical relationships encoded into smart contracts. Also called automated market makers (AMMs), there are different types of bonding curves, including but not limited to constant product, constant function, concentrated liquidity, variable product, time-weighted, and even order book-based bonding curves. Bonding curves have also been ‘augmented’ with the addition of common pool treasuries or even prediction markets, in order to improve the collective signaling capacity of these new tools for social and ecosystemic benefit.

This is just the beginning of their utility, and current tools have only taken the first steps to explore this design space. Bonding Curves are a gateway for engineered control systems to facilitate and improve the economic management and value accrual systems of Web3.

Our mission is to drive forward the research, development, education, and application of Bonding Curves in their various forms.

🎯 The Purpose of this Research Group: The goal of this proposal is to establish a foundation for continuous research, development, and education around bonding curves. Our aim is to establish a deeper understanding of bonding curves in general, and a more thorough analysis of their applications thus far, including the TEC Augmented Bonding Curve. We plan to create a content funnel about bonding curves that educates the wider public and motivates projects seeking bonding curve expertise to connect with our community. This, in turn, will fuel the growth and development of the bonding curve space while providing economic opportunities to those involved with developing bonding curves for projects.

⚙️ Continuous Development and Research Methodology: It is worth noting that research initiatives are fundamentally different from development processes, which is one reason we are proposing this as a research ‘marathon’ work, as opposed to more task-based ‘sprints’ commonly held on faster time cycles among development teams. Research is fundamentally an exploratory exercise, often without clear outcomes at the outset of the initiative. For that reason, we will set deliverables such as content production timelines and hours input into processes as they’ve been laid out, rather than trying to determine ahead of time the exact topics or outcomes produced by the end of this first research marathon.

📚 Past Work & Achievements : The BCRG was founded in March 2023 and has three operational workstreams including Education & Content, Research & Ideation and Bonding Curve Analysis & Modeling. Here is a list of some of the work produced:

1. Exploring Bonding Curves: Differentiating Primary and Secondary Automated Market Makers - https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d/1Pxl_fbIPifIQ4_y0xoJGZGEk70qfOM3Gi9nWycm-8k
2. Knowledge Library - a collection of resources discussing bonding curves and the mechanism design space for crypto economic system - https://www.notion.so/Knowledge-Library-ea2a517d82b142778e033a45bc115a80
3. Case Studies (WIP) - case studies done on projects that have employed Primary Automatic Market Makers - https://www.notion.so/PAMM-Case-Studies-e994a43ab4dc4661aa355f868a20071e
4. Bonding Curve Classification Notebook (WIP) - a quick look at different kinds of curves and their equations - https://www.notion.so/Bonding-Curve-Classification-0e85d52249594c6aaaf7e3dcdcd958b1
5. Augmented Bonding Curve Model Github Repo (WIP) - an opensource python model used to simulate the Augmented Bonding Curve from the TEC ecosystem
6. Bonding Curves Parameters Model - https://github.com/bonding-curves/conding/blob/main/conding/pamm/abc.py
7. Token Engineering Commons Dune Dashboard & Python Translation - https://dune.com/rxx_/bondingcurves

💸 Past Funding : We applied and received catalytic funding from the Token Engineering Commons and Gitcoin, however we need further funding to continue in Phase 2 of our research and development so are currently applying for grants.

🎖️ What Success Looks Like:

1. Social media content posts, digestible and thought provoking
2. Posts have community traction, bringing in new leads and interest into the TEC
3. Improved methodology for analyzing Bonding Curves on-chain data
4. Explore new bonding curve mechanisms and shed light to the creators of the provisions to include in their bonding curve : Shutdown & Liquidation Procedures, Develop gamified UX visualizations of the Bonding Curve where members can play with the parameter to see the final impact.
5. Other unanticipated positive externalities discovered through research
6. We would like to use our research to ultimately develop a Product & Services Business Model around Bonding Curves and are also going to experiment with launching our own investable workstream and bonding curve with Inverter Network.

🔊 How We Will Share Progress:

1. Transparent shared work processes (call notes, Miro board, call recordings as available)
2. TEC forum announcements every third week, with links to posts & other work
3. Scheduled interest group in the TEC Discord at the completion of the research marathon
4. Deliverable outputs (videos, tweets, articles, etc) will be shared with the TEC community and beyond

Thank you for supporting Token Engineering public goods and the Bonding Curve Research Group! 🙏