EP 19: Token Bonding Curve Algorithms for Autonomous Market Makers (DEX)

EP 19: Token Bonding Curve Algorithms for Autonomous Market Makers (DEX)

Reading Time: 2 minutes
EP 19: Token Bonding Curve Algorithms for Autonomous Market Makers (DEX)
EP 19: Token Bonding Curve Algorithms for Autonomous Market Makers (DEX)

Listen on Google, YouTube, iTunes, Spotify

In Part 1, we covered the basics of token bonding curves and understand how the shape of the curve affects the incentive mechanism. We used a 2D graph to visualise the understanding of incentives.

In this episode, we look into the application of token bonding curve in Decentralised Exchanges, DEX. Specifically, the use case of Autonomous Market Maker.

Case Studies

We dive into 4 case studies, of how token bonding curve adds real economic value to the ecosystem.

Projects in this episode: Bancor, Uniswap, Balancer, Curve

The concept of bonding curve in this 4 DEXes are the same. But the application of how the token bonding curve algorithm is built is different.

So we uncover the 4 various algorithms used in the 4 different token bonding curves.

Ps: it is quite long because there is so much content to add in. Please let me know of any areas you’d like a deep dive.

⚠️ A Change: I realised speaking too much about the math is not adding value to you. So I’ll be explaining the concept and implications of the math instead. If you want further explanation, just comment on the areas you’re interested in, and I can make further explanation and dives ⚠️

Quick navigation:

  • Addressing 3 issues of previous episode: 00:26
  • Content we will be covering: 05:40
  • SUMS of token functions: 07:11
  • TBC in Stable tokens (pegged tokens): 09:17
  • TBC in Security and Utility tokens: 10:35
  • TBC in Autonomous Market Maker (AMM): 11:42
  • Why AMM in Decentralised Exchanges (DEX): 14:39
  • Which DEX that use AMM: 17:03
  • Math concepts of Bonding Curve in Autonomous Market Maker : 18:13
  • General bonding curve in AMM: 23:03
  • Case study 1, #Bancor: 26:41
  • Case study 2, #Uniswap: 34:25
  • Case study 3, #Balancer: 40:18
  • Case study 4, #Curve: 46:29
  • Application to projects: 50:07

Want more in-depth content? Join our Token Economics 201 course at www.education.economicsdesign.com! Introducing an early bird discount before I refilm all the episodes. You will still get access to the new episodes when it’s done!

|| Use code: **Earlybird** to get 25% discount.

Parts will be available on Economics Design soon, when I launch the premium version on 15 Aug 2020.

Leave a Comment

Your email address will not be published. Required fields are marked *