PSWAP Rewards Part 2: The SORA Token Bonding Curve

Polkaswap
Polkaswap
Mar 9 · 10 min read

TL;DR

  • The token bonding curve is a smart contract that holds assets of reserve currencies to enable forward guidance price predictability for the XOR token
  • At the launch of the SORA v2 network, 350,000 XOR will already be in existence that will not have any reserve asset backing
  • To help collateralize the token bonding curve, 2.5 Billion PSWAP are provided as special bonus rewards when buying newly minted XOR from the token bonding curve
  • These PSWAP rewards will start at launch
  • DOT and KSM held in reserves by the token bonding curve will be used to secure parachain slots for the SORA ecosystem
Biker waifu Ichigo Soramoto

ソラの分散型大蔵省

The SORA token bonding curve acts as the decentralized, on-chain manager of the XOR token. It works by taking in reserve assets and minting new XOR, or conversely, de-mints XOR and releases reserve assets.

  • KSM (at full launch, not beta launch)
  • ETH
  • DAI
  • VAL
  • PSWAP

Decentralized Reserve Collateralization Incentives

At the launch of the SORA v2 network, 350,000 XOR will already be in existence. This means that the SORA token bonding curve will have an unfunded liability of 350,000 XOR worth of DAI, 350,000 XOR worth of ETH, 350,000 worth of VAL, and 350,000 XOR worth of PSWAP.

Reward Calculation

There are 2.5 Billion PSWAP reserved for incentivizing the build up of reserves in the token bonding curve. The rewards will be distributed according to the following calculations.

NOTE: these numbers are for illustration purposes only!

Vesting

After being earned, rewards are not given instantly to the user. As with the Polkaswap liquidity reward farming program, the special PSWAP rewards for users who purchase XOR from the token bonding curve are distributed as a fraction of the daily burn. This gives guarantees that a sudden supply of tokens will not immediately flood the market and gives clear forward guidance about the supply of tokens in circulation.

The PSWAP strategic bonus vesting curve is defined by the line: y=-0.000357x+1 until it reaches 0.45 (45%). Then it is flat until all rewards are vested.

PSWAP Rewards Claiming

Users can claim only vested tokens and the claiming will be possible at any time as long as there are non-zero rewards for an account.

Buy Price Function

The buy price function of the token bonding curve is the price at which XOR can be bought at.

Example: Buying XOR with DAI

Assume:

  • 1,400 DAI in reserves
  • Current Buy price for XOR from the token bonding curve is $306
  • The secondary market has 5 XOR and 1,400 DAI in an xy=k constant product liquidity pool

Sell Price Function

To calculate the difference between the ideal reserve amount and the actual reserves, we just subtract the area under the actual reserve curve from the area under the ideal curve.

  • under 20% collateralized: +3% fee
  • under 10% collateralized: +6% fee
  • under 5% collateralized: +9% fee

Example: Selling XOR for DAI

Assume:

  • 50,000,000 DAI in reserves
  • Current sell price for XOR from the token bonding curve is $255
  • The secondary market has 5 XOR and 1,400 DAI in an xy=k constant product liquidity pool

Some Notes on the Multicollateral Bonding Curve

When user deposits collateral token which is not a reference token (i.e., not DAI) the buy function determines its reference (DAI) price in order to perform calculations w.r.t. the USD representation.

Use of the Token Bonding Curve Margin

When users buy from the XOR primary market (token bonding curve), 20% of the amount of deposited tokens are put into a pool that periodically buys back and burns XOR and then the amount of XOR burned is re-minted and distributed proportionally as shown below. The other 80% of deposited tokens are stored in the token bonding curve as reserves.

  • VAL holders allocation: 9%
  • SORA citizens: 0.1%
  • Stores and shoppers: 0.4%
  • Parliament and development: 0.5%
  • Projects: 9%

Unidad de FOMOnto

Those who have been paying attention have probably already noticed that the token bonding curve as initially designed inextricably links XOR to the value of the USD. This is potentially a problem because the purchasing power of the USD can fluctuate, exogenously impacting the value of XOR.

Conclusion

The SORA token bonding curve acts as a completely decentralized monetary authority for the XOR token, autonomously managing the XOR token supply using market forces. The provision of reserves in the token bonding curve is crucial to maintain forward exchange rate guidance for XOR.

About SORA NEO Network, Polkaswap, and Fearless Wallet

SORA is a new economic system aimed at creating a supranational, world economic system with built-in tools for decentralized finance (DeFi). The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the capability to bridge external blockchains (like Ethereum) to the Polkadot ecosystem.

Polkaswap

A DEX for the Interoperable Future

Polkaswap

A non custodial liquidity aggregator cross chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through one of a kind Aggregate Liquidity Technology (ALT) with the security and convenience of a DEX. Website: polkaswap.io

Polkaswap

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Polkaswap

https://polkaswap.io is a non-custodial cross chain AMM DEX designed uniquely for the Polkadot and Kusama ecosystems and hosted on the SORA 2.0 network.

Polkaswap

A non custodial liquidity aggregator cross chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through one of a kind Aggregate Liquidity Technology (ALT) with the security and convenience of a DEX. Website: polkaswap.io

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