⚔️ The Challenge: In the early days of crypto and ICOs, many projects and DAOs launched static supply tokens which struggled to expand and contract with bull and bear market swings, and are not adaptive enough for the dynamic nature of these nascent economies.

This has also 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.

Many DAOs and organizations are looking to move from static supply to dynamic issuance models and reduce volatility, however, many of these economic mechanisms and markets remain untested, and the designs need to be further studied and validated, in order to deploy safe and sustainable economies.

⤴️ Overview of Bonding Curves: Bonding curves are an interesting new tool in the Web3 space that tie two or more elements of a system together through mathematical relationships encoded into smart contracts. Bonding Curves are a ‘supply discovery’ mechanism that allows new tokens to be minted (or burned) by the deposit (or withdrawal) of reserve assets when the demand for new tokens is greater (or less) than the available supply. 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.

Read more: https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d

🚦The Opportunity: Bonding Curves provide an economic invariant between the supply of tokens and the reserve assets backing their value, making token price deterministic and providing guaranteed liquidity for tokens. Adjusting the circulating supply based on demand dampens the volatility and couples with the demand for the token’s utility.

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. Other blockchain ecosystems could employ these mechanisms to support their token economies’ success.

These open source tools should be further studied, modeled and explored in order to maintain open libraries of tools and documentation and establish connections with organizations who need help designing and deploying them (which could also serve as opportunities for service groups to develop revenue streams for further work and research).

🎯 The Purpose of this Research Group: Our mission is to drive forward the research, development, education, and application of Bonding Curves in their various forms. This research group will provide chain agnostic research, development, education, and application of Bonding Curves in their various forms. This R&D will attract new talent and interest in the field of Token Engineering and to other blockchain ecosystems. Additionally, it will support building a common understanding and language around bonding curves and their applications to DAOs, businesses, finance, and economics.

This research offers improvements for understanding the design and ongoing operation of these new economic mechanisms, benefiting the field of Token Engineering directly through upgraded tools like open source libraries, models, simulations, and dashboards. The research and development also has huge impact through networking and deal flow for any blockchain ecosystem that would like to make use of these tool sets, open libraries, primitives, and research.

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.

📚 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:

EDUCATION - ARTICLES, DOCUMENTATION & VIDEOS -Educational Gitbook https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library

• Bonding Curve Case Studies https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library/case-studies -Engineering for Resilience with Primary Issuance Markets https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d/0zc8X-J6r65yc9_MwdVeY69QdFS8Nc6Jh7F92e93koc -Breathing New Life into Web3 Economies https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d/WOadRX5zqvgpjSVDjnd1cjHPNVQY8hXXRYlEjIvNOTY -Exploring Bonding Curves: Differentiating Primary and Secondary Automated Market Makers https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d/1Pxl_fbIPifIQ4_y0xoJGZGEk70qfOM3Gi9nWycm-8k -Modeling & Simulating Bonding Curves https://mirror.xyz/0x8fF6Fe58b468B1F18d2C54e2B0870b4e847C730d/3gTCNW1LcsNd_O8zgfgERXnZhA_8wYyyHkZRe-oxIns -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 -Bonding Curve Classification Notebook (WIP) - a quick look at different kinds of curves and their equations https://www.notion.so/Bonding-Curve-Classification-0e85d52249594c6aaaf7e3dcdcd958b1 -Open Research/Study Session Call Library https://www.youtube.com/@BondingCurve -Bonding Curve Parameters: Narrative Model Walk Through https://www.youtube.com/watch?v=CQwYXXjll0U -Public Good Token Comparison Analysis Walk Through Video: https://youtu.be/_IgkMSvPKuM?si=peW65BVDw7BFld1Y

TOOLING -Bonding Curve Simulator App http://172.105.101.205:5100/sim_app -Augmented Bonding Curve Model Github Repo (WIP) - an opensource python model used to simulate the Augmented Bonding Curve from the TEC ecosystem https://github.com/bonding-curves/conding -Bonding Curves Parameters Model https://github.com/bonding-curves/conding/blob/main/conding/pamm/abc.py -Token Engineering Commons Dune Dashboard & Python Translation https://dune.com/rxx_/bondingcurves

👥The team:

Shawn Anderson, an entrepreneurial data scientist with an MSc. from Simon Fraser University, founded Longtail Financial in 2018. Longtail serves diverse sectors like DeFi, NFTs, and DAOs. He was also a founding steward of the Token Engineering Commons and is a continuing contributor to cadCAD, an open-source modeling and simulation tool. Shawn supported the migration of TEC to the Optimism chain. https://www.linkedin.com/in/shawnwanderson/?originalSubdomain=ca

Jeff Emmett is a skilled Token Engineering Researcher and Engineering Communicator at BlockScience and co-founder of Commons Stack. He is deeply engaged in exploring and researching systems design and analysis with a focus on economic and governance mechanism design. He has a Bachelor’s degree in Electrical Engineering from the University of Waterloo. He is the co-author of “Exploring MycoFi: Mycelial Design Patterns for Web3 and Beyond” and countless other research papers and articles. https://www.linkedin.com/in/jeff-emmett-05268139/ https://medium.com/@jeffemmett

Jessica Zartler is a researcher and communications lead at BlockScience. She is also a Founding Steward of the Token Engineering Commons, an advisor to the Token Engineering Academy and the BioFi Project , and a course author for the governance module of the Token Engineering Fundamentals course. She is also the former Ecosystem Development Lead at CommonStack and co-author of “Exploring MycoFi: Mycelial Design Patterns for Web3 and Beyond”. Her work focuses on systems design and analysis, including economic and governance mechanisms. She is passionate about ecological regeneration and Web3 as emancipatory tech. https://www.linkedin.com/in/jessicazartler/ https://x.com/jessicazartler

Rohan Mehta is a Data Scientist and Token Engineer at BlockScience, with a strong background in Physics and Electronics from BITS Pilani. His work focuses on consulting Web3 projects on tokenomics and building incentive mechanisms aligned with stakeholder actions and system goals. He uses tools like cadCAD and Machinations for complex system analysis, and teaches at the Token Engineering Academy. https://www.linkedin.com/in/rohan-mehta-5b086b190/?originalSubdomain=in

Hashir Nabi is an Aerospace Engineer and researcher at BlockScience. He focuses on building open-source public goods infrastructure, crypto-economic primitives, and token engineering tools while actively contribute to the field by authoring articles/case-studies.

Rex is currently pursuing a Master's in Economics and Data Science, after completing his bachelor's in Economics with Computing. With three years of experience in data engineering and analytics, arex has spent the last two years specializing in the cryptocurrency industry. They have contributed to innovative projects at organizations like the TEC, BCRG, Wonderland, and Inverter. Rex supported the migration of TEC to the Optimism chain. https://x.com/0xr3x

💸 Past Funding : The Bonding Curve Research Group is grateful for the Token Egineering Commons and Optimism Retro PGF grant funding and funding from the GoGoPool team which provided crucial, catalytic seed funding for the BCRG to begin work and execute on an initial set of deliverables. We are seeking further funding to continue our research and development and are grateful for your support and any referrals to aligned partners 🙏

🔬 Further Research, Development, Education & Community Outreach: -Improved methodology for analyzing on-chain Bonding Curves data -Explore new bonding curve mechanisms such as -Shutdown & Liquidation Procedures -Develop gamified UX visualizations of the Bonding Curve where members can play with the parameter to see the final impact -Dogfooding an investable workstream and bonding curve with Inverter Network, which could become a template for other DAOs or organizations -Exploring volatility dampening mechanisms -Continuing our study sessions with invited guests from various token/blockchain ecosystems and building the video library -Educational posts and knowledge sharing on social media platforms

🔊 How We Will Share Progress: -Bonding Curve Research Group platforms including Github https://auspicious-cap-b5c.notion.site/Bonding-Curve-Research-Group-a0fe00e81d84435a8fddd547a7888063 -Transparent shared work processes (call notes, Miro board, call recordings as available)

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