# Bonding Curve

We will issue $fDAO tokens on the bonding curve, with $FOR as a reserve asset. The bonding curve contract is a special type of smart contract that issues $fDAO tokens through a buy and sell function. To purchase $fDAO tokens, the buyer sends FOR to the Buy function, which calculates the average price of $FOR for $fDAO tokens. The Sell function works in the opposite way. The contract will calculate the current average selling price.

The bonding curve to be adopted for this launch is as follows:

*Y = A X + B*

Among them,

*Y*: $fDAO token price

*X*: $fDAO token supply

*A*: Curve slope

*B*: Curve intercept

The user normally buys and sells on the curve does not affect the slope of the curve, but the slope will change if the following two situations occur:

Slope Rise: 60% of platform income will be converted into $FOR directly as fDAO reserve assets, and no new $fDAO tokens will be generated. Assuming that the current number of $fDAO tokens is Xt and the number of deposited $FOR is

*M*, the new slope Aup becomes:Aup = 2M/Xt2 + A

Slope Decline: When bad debts or hacker attacks occur in the system, it is necessary to withdraw the reserve asset $FOR from fDAO without burning $fDAO token. Assuming that the current number of $fDAO tokens is Xt, and the number of $FOR withdrawn is

*N*, the new slope Adown becomesAdown = A - 2N/Xt2

Last modified 8mo ago