Bonding curve modifications

If the price follows a mathematical formula and is not the result of a meeting between buyers and sellers, then yes it is not a free market.
The price for a certain amount will always be lower on the bounding curve.

And to say that it’s better to mint tokens than to use market making(or LP) is not my definition of free market.

But it’s just a matter of time because one day or another, some REP holders will have an interest in changing this system. In the meantime I hope that the big fishes will feed well and that we will manage to use correctly this money that we pay the full price.


I think the curve should primarily be a distribution/funding mechanism rather than the primary outlet for price discovery. The treasury is well funded now and DXD is an amazing value relative to the treasury holdings. The curve is now acting as price ceiling, which I think is counter productive. If anything it should act as a floor.

The linear growth is at odds with how these communities grow in my opinion. In an open source world, DAOs compete by pace of innovation and we should aim for exponential product, community, and price growth.

I completely understand wanting to avoid making this into a pump scheme, but I don’t think that’s the ethos here. The curve acts as the baseline for price growth, treasury growth, and community growth.

Dxdao’s bonding curve solves the funding problem, The importance of this can’t be understated. Investors mint Dxdao and the war chest grows, As long as investors have faith in the REP holders Dxdao will continue to be a great investment.

Dxdao’s market cap more or less mirrors the assets accumulated, this is something that I have never seen before and is quite remarkable.


Protecting existing DXD holders from inflation is also necessary for sure, thus a steeper bonding curve is likely the solution.

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There is no reason to make the curve exponential except to please previous investors. Obviously, making the curve exponential would also dry up a lot of the future funding (because it would become exponentially more expensive to buy DXD).

And I just want to make sure everyone understands that nothing prevents the price to grow exponentially under the current curve. To say “DXD is bounded by linear growth” is misleading.


This is a strange definition of free market. Is uniswap a non-free market? Why is the fact that the price will always be lower for a certain quantity if buying from the bonding curve a problem. You could say the same for OTC orders, which typically yield a better price than open market buys in size.

But if I am reading between the lines correctly, your problem with the mechanism is that someone can buy a lot from the curve without impacting price on the secondary market. But I don’t see this as a problem with the bonding curve itself, but instead the ratio between the buying and selling into the curve. That big buy into the curve would ideally make a material difference to the price I can sell back into the curve. But if designed correctly, it does. But it makes an important trade-off. Buying from the curve increases both the price floor for the asset and raises the threshold for all future buys to come from secondary sources. If someone buys from the curve, it makes buying from the secondary market more attractive for all subsequent buyers.

@filll How is it acting as a ceiling? I agree it should act as a floor, but suspending the curve or promoting only secondary market buys hurts that rationale as less gets funneled into the buy back reserve.

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I would agree with you if the inflation of DXD would be automatically generated by some random mechanism but it’s not the case here: You don’t need to protect investors from inflation when the inflation is created by new investors investing more money at a higher valuation. If anything, previous investors are benefiting from new investors investing:

  1. more money goes to the treasury of the DAO
  2. the issuance price goes up, which putts healthy upward pressure to the secondary market, which in turn enables previous investors to markup their investment and/or sell at a higher price.

this is an important point. “Aiming for exponential product, community, and price growth” is a worthwhile ideal, but you can’t have one without the others. Networks and other entities that see exponential growth have it in all 3. What is being discussed here is mostly price. If the DXDao is going to be an important and valuable organization in the future, it won’t do so just because the price of DXD is high. It will succeed because it puts out great products and drives value to the token, which then raises the token’s price. Anything else is just a speculative bubble.

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Sorry but I have to call BS on this one. It totally is a free market. Whether you buy from a smart-contract or from another person or from a liquidity pool, the buyer is free to buy as much as he wants… or not.

By your definition, Uniswap is not a free market either. “What if I want to sell DXD at $10 and Uniswap only gives me the option to sell at $5?”. Your argument that if the price is calculated algorithmically then it’s not a free market does not make sense.

The main difference between buying from the curve and buying from the secondary market is where the money goes:

  1. if you buy from the curve, then it’s an investment and the money goes to the treasury of the dxDAO.
  2. if you buy from the secondary market, then it’s a trade and the money goes to the seller

Once again, removing the curve or making it exponential will only benefit previous investors at the expense of the dxDAO itself and at the expense of future investors. Doing so would be a short sighted move.


@thibauld do you have any documentation why the linear bonding curve was set at its current gradient? I’d like to take a look. I assume you looked at the effects of making it flatter/steeper? (by steeper, I don’t mean exponential).

  1. more money goes to the treasury of the DAO
  2. the issuance price goes up, which putts healthy upward pressure to the secondary market, which in turn enables previous investors to markup their investment and/or sell at a higher price.

Not necessarily, the bonding curve is providing sell side liquidity by issuing more DXD without providing a buy side, well at least not currently, since the buy-back curve is extremely weak, thus the bonding curve is not supporting the price in any manner.

Most bonding curves are slightly exponential and I think that is generally the most optimal model.

If the dxdao growth is parabolic (which it likely is, as most network effects are parabolic, such as the growth of Covid19, any organization, belief systems, any social media platform) and the curve here is linear, which means ill suffer from exponential revenue dilution from the DAO through exponential inflation.

The issuance of DXD is already parabolic in the last 2 month, and as a holder im subject to 10% of the revenue generated by dxdao, but if the issuance is parabolic, I am being exponentially diluted, rather than benefiting from the exponential growth.

Meanwhile if the curve is parabolic to match the growth of a network effect, then, I will not suffer from exponential DXD dilution due to a linear curve.


Marketcap of DXD


The slope of the curve is a pure “marketing” decision which has no financial impact. Use a low degree slope and you’ll end up with many tokens (so tokens will have low unit value). Use a high degree slope to end up with fewer tokens with higher unit value. So there’s no right or wrong decision here :slight_smile:

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I understand the argument and it does makes sense even if I disagree with it. If we take as assumption that the growth of the dxDAO is parabolic, then its revenues should be too and a parabolic growth of revenues will offset the “suffering” of investors due to the exponential revenue dilution.

So, as you point out, the current phase of the dxDAO is phase I: the speculation phase. In the absence of revenues, investors will speculate on the future of dxDAO and invest until they think that the issuance price becomes simply too high to be justified. In a bull market, this “fair issuance price” can obviously be very high as we’re witnessing.

Then will come phase II: the build phase. In this phase, DXD will likely trade mostly on the secondary market for a while, the time for the dxDAO to start deploying its capital and to start generating revenues.

Finally and hopefully, we’ll enter phase III: as revenues are ramping, investors will finally be able to value DXD on a more fundamental, future cash-flow basis which will over time push DXD to new highs.

Again, I agree that what you suggest would be better for previous investors. But once again, it would be at the expense of all other stakeholders:

  1. the future investors who would have to participate at a premium that previous investors did not have to suffer.
  2. the dxDAO itself because it will hamper the ability of the dxDAO to raise more funds in the future.
  3. all the future users of dxDAO products because the dxDAO’s lesser ability to fundraise will translate into lesser capital to deploy to build cool products and services.

Let’s assume for a minute that we do indeed modify the curve to make it exponential. Let’s assume then that, as we’re in a bull market, the speculation continues for a bit. It will push the issuance price to a much higher price than if the curve was linear. Then, after some time, we reach an issuance price that the market estimates is a maximum for now (note that we’ll reach that point no matter how the curve looks like).
With an exponential curve:

  1. Phase I: the dxDAO will have gotten less funding then it would have with a linear curve (for the same final maximum issuance price)
  2. Phase III: the dxDAO will also receive significantly less funding for the same revenue growth, hampering its ability to scale.

But, yes, I agree, with an exponential curve, it would be better for previous investors:

  1. Phase I: The exponential buy curve means that there is more volume to be able to sell DXD on the secondary market (as more DXD needs to be purchased on the secondary because there is less issuance, giving sellers more room to sell). Put in crypto terms: “it’s better to sell your bags”.
  2. Phase III: The exponential curve insures less inflation which will obviously benefit previous investors as, for the same volume of purchase, it will drive the price up on the secondary market more quickly (because less money will go to the treasury of the dxDAO).

So, in conclusion, given the ambition of the dxDAO, I think it will be much healthier to stick with the current linear curve. I see no valid reason as to why the dxDAO should give previous investors an advantage over all other stakeholders. But I do understand why a current investor would push the idea :slight_smile:


its disingenuous to claim that the slope of the curve has “no financial impact”. It most obviously has a financial impact.

Kinda think you two Fairmint :tm: bonding curve salemen are astroturfing this thread. Your bonding curve no longer makes sense if the DAO decides that is has raised enough capital.

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on parabolic bonding curve:

If we take as assumption that the growth of the dxDAO is parabolic, then its revenues should be too

it will hamper the ability of the dxDAO to raise more funds in the future.

If the revenues are parabolic like growth, then the DAO will be insanely rich, it wouldn’t need funding, and also, you just missed the entire point of investing, which is to benefit off growth, and all successful growth of anything related to humans has all been exponential, whether its the internet, a organization, a company, a social network, a religion, a currency, etc…

A liner bonding curve prevents earlier investors to obtain the premium of the growth, and with about half of all DXD was been minted in last 3 weeks, it seems like it is growing parabolically.

the future investors who would have to participate at a premium that previous investors did not have to suffer.

Bitcoin, which is the longest surviving cryptocurrency, has an exponential curve, which is the halving every 4 years, where becomes exponentially harder to mine over time, the early miners are rewarded, and that does not seem to be discouraging new people to get in.

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No, it doesn’t. It has a marketing / perception impact, not a financial impact. No matter what the slope of the curve is, for the same investment A, the organization will receive the same amount of money. What changes is only the amount of tokens received by the investor, as I mentioned in my previous answer.

I don’t know who’s the other one you’re referring to but they are not affiliated with Fairmint. And regarding your ridiculous accusation of astroturfing this thread, I’ll let the other readers judge for themselves (I haven’t mentioned Fairmint once, you did).

If I am here and interested in the discussion, it’s more as the author of the continuous organization whitepaper than as the CEO of Fairmint.

The continuous organization whitepaper details a new framework to better financially align all stakeholders of an organization. So, when I hear the arguments of investors willing to recreate an imbalance in their favor, I can’t blame them because that’s the rational thing to do, but, at the same time, you can’t expect me to shut up. I’ve obviously given some thoughts to the model and I think I have decent arguments that other dxDAO stakeholders might want to hear on why it’s a bad idea to change the curve.

But, as you said, ultimately the dxDAO will take its decision, no matter what I think. And that’s great that way :slight_smile:

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If the dxDAO becomes insanely rich, it will then have many different ways to largely reward investors, either via burning tokens, increasing its revenue commitment (currently at 10% a low value with lots of room for growth) or even funding the reserve directly. So the dxDAO has many ways to make investors benefit off growth, that is not the issue. My point is solely that it should be up to the dxDAO to decide how, when and how much.

If you ask me, I think you’re fighting the wrong fight: you should rather fight to get some voting rights for DXD holders rather than fighting to change the curve. Given how the dxDAO is organized, I personally think it would make sense for DXD holders to have some voting rights. My 2 cents.


I think they are paying attention.

Simply put, your bonding curve is inflexible and does not adapt to market conditions like current funding environment, the cyclical nature of fundraising, macro events, etc; and sells equity like rights too cheaply at the expense of current equity token holders.

I am not even against the idea of using the bonding curve in principle just think its time to seriously start thinking about replacing/modifying the Fairmint :tm: Bonding Curve :copyright: and to debate your scheme on the merits in the market place not just as the default assumptions we’ll always have to deal with.

It sells DAO equity too cheaply at the expense of current token holders lol. How do you not see this? I would guess bc you dont have any skin in the game. All this talk of “but but dxd is up 15x from the low, is besides the point”. Y’all want to attract people to build cool decentralized mind bending technology? You better have some gold in the till


Uniswap doesn’t mint new token

why you always said “Changing the bonding curve seems very short-sighted to me”,do you mean DXdao always cant make profits?should fundraising all the time?if stop the bonding curve,Dxdao would be die?
you seems think people want to change the bonding curve just because of want to pump the price of dxd,right?

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