Revenue generating Decentralized Organizations through bonding curves

Transcript

hi guys my name is you've got Adolphe and I'm part of a lime chain and today I'm going to talk about continuous organizations or how we can use bonding curve smart contracts to basically have a revenue generating decentralized organizations be autonomous or not quick question how many of you have heard about bonding curves before alright that's pretty good and continuous organizations alright cool so really quick what we do we're basically a team who loves building stuff and we build a lot of different tabs and clock chain

solutions for other companies and in addition to that we we have some tools ourselves we have it online which is a smart contract development framework we have lime pane which is basically a Fiat on-ramp - and we also have a caddy me for blockchain developers we're based in Bulgaria in London and let's get it going so I saw this with a meme on Twitter and this is pretty true writing we want to fund different stuff whether is it - link community projects BAM let's do it investment fund same thing there's a bunch of different dowels going all around the place especially in the last

year so however I think a big problem with the dowels is that it's hard to achieve a sustainable funding model so you can build a nice hype in the beginning get a lot of people on board it pledged some funds however it gets increasingly difficult to attract funds going forward because basically the vote or them the amount of meaning or votes that these guys are going to get going forward is diminishing while the original net members are get diluted as well so go forward and basically dowels ICS stos and cryptocurrency all were born out of frustration with legacy systems however

a lot of doses do an so we were we were basically frustrated with the financial system which weighted cryptocurrencies we're frustrating with venture capital we created ICL's were create frustrated with the IC also created stos and now we have dowels out of frustration with the legacy organizational system and I think we can so we have pretty good examples that we can aim to solve basically the sustainability problem in taos with bonding curves and I have for the people that have no idea what this is I have a very brief explanation is basically a simple mathematical curve that means the

price grows as the supply increases so you can have this for for the buy price and the sale price but I'll explain more about this going forward so their cup of projects not doubt but projects using bonding curves to basically determine the price of their of their products the first one is a muhfucka tow what they do is they sell coffee pretty simple however those the coffee the coffee packs that they sell they're represented by tokens or indeed the price of those tokens is determined by the bonding curve smart contracts so the more people buy coffee

basically the more hyper the coffee gets and those prices go up however if the people so to sell these tokens the prices go down another example is the unit socks how many of you use unit swap so I use it as well I love you swaps I love socks but the hundred dollars for some sock is pretty damn much if you ask me whoever it's a good it's a good marketing tool basically the guys that unit swap created you know socks with a bonding core smart contracts and more people buy those socks the higher the prices however the bonding curves can be used for something kiting much more

meaningful there was supposed to be a bunch of emojis over there but for some reason they don't work so what's continuous organization you know in a very high very high level view is basically a concept invented by a gentleman by the name of tipo father hope I'm pronouncing the name right my French is not that good it's a two powered by bonding curves to basically achieve ongoing or constant fundraising to achieve long terms stakeholder alignment bit investors or employees to provide liquidity for investors at all times to securitize those tokens and to be governance agnostic meaning that it

can be Dow or it can be a legacy organization so basically a continuous organization is a any organization whether it's a tower not with a decentralized autonomous trust and the natural question that arises here is what work is that so decentralized autonomous Trust is a smart contract that means burns and distributed security tokens to a banach of contract the contract can have a bunch of functions and most often those are by say buy sell and pay I'll talk more about that later however it's really important to know that basically the smart contract or the dad keeps a bunch of the reserve a bunch of the

incoming cash flows from investors or from revenues in a buyback reserve basically the buyback reserve allows for instant liquidity for the investors who want to go out at any given time and also this means that the investors going out they are not basically reducing the cash flow of the organization itself so forming functions like I said buy sell this is for investment or selling the tokens pay for generating revenues or and another one that can be added is dividends through the bonding course much through that smart contract we can

distribute dividends to to still hold to Shaco shareholders and I'm going to show you some real-life examples about that at the end of the presentation so going a bit deeper this is a very simple graph from the continuous organizations white paper written by Tebow basically we see we have the investor let's call her Jane and she wants to invest n eat into the organization she received her tokens however we see that Jane Jane's eat 90% of them will go to the organization and 10% of those will be helped in the buyback reserve and basically the

parameters of the buyback reserve can be predefined in the smart contract so it can be 10 percent it can be 15 20 30 whatever it is on the other hand when Jane wants to sell her tokens she basically gives back the tokens to the dad Wow the eat the the each receives comes from the dad itself so it doesn't impact the basically the tokens the cash flow of the organization because the the fronts come from the reserve and not the organization itself going forward we have the pay function of the smart contract which basically shows what happens when the customer of the

organization actually pays for service or product or whatever disease it can also be investment returning money so we see that there's eat or money going into the debt and a bunch of those 10% are still going back into the buyback reserve the rest goes to the organization while that also means tokens and this is really important because whenever new tokens or me minted the value of those tokens goes up because of the bonding curve and this is basically really great for providing long-term shareholder incentives meaning that if I want to invest in a continuous

organization I would so my goal would be to wait until the organization either more people invest or the organization start generating revenues which will bring the value of the price up and here we can see that there is a correlation between the the buy price curve and the sale price curve this means that you find invest now and if I want to get out immediately because of the buyback reserve I will have to go out a really really lower price which basically incentivizes me to stay in for the long term and I would really recommend you guys that you read continuous organization white paper I have a list of sources at the end of the

presentation and I'm also going to share this in the community telegram so the bonding curve smart contract they could they could come in different shapes so I'm going to give the examples to two of them basically if we see the top left one it's called the sigmoidal shape and this basically can be used to incentivize people that go in really really early however to decentralize gradually the people going late so this could be for example if we have a platform that tokenize is for farmer IP or any kind of intellectual property we

it can incentivize through such a such a curve the people that are investing it in really really early on and disincentivize gradually people to just want to piggyback that at the end on the bottom left oh this is basically a negative exponential I believe bonding curve and it can be used for example for crowdfunding projects to incentivize people early on however to not descent if I so at least not that much the investors are in the later stages and there's a good article about all different curves and shapes below so the thing is that bonding curve smart

contract so continuous organization they can be subject to fronting attacks meaning that for example if I have a if I basically sent a transaction to invest in in the continuous organization this when the transaction is completed the price of the tokens will naturally go up however if somebody sees that this transaction is broadcasted however it hasn't been confirmed yet they can use basically higher gas fees to front 1p and invest before me and when my transaction goes through their tokens would be instantly much more higher and this can be avoided simply by setting a gas limit or having flat or fixed gas

fees for investing into the continuous organization and I know all these sounds are pretty abstract so I have some use cases so first of all this can be a great sustainable funding model or this can incentivize employees because you see 20 utility tokens are great however I don't think that they can really really incentivize employees because they can be subject to pumping domes and so on and so on it can be also and to give it a tokens at least not most of the cases it can also be great for community participation and network effects investment vehicles or demos so the first example I have is a brilliant

project called molecule so what they what they do is I think I mentioned it just feels lies before they basically fractionalize securitize and distribute farmer IP so they basically have a platform for investing into farmer research and the researchers are basically incentivized to through bonding curves and security tokens and we never farmer companies want to use that IP they have to they have to pay it's a really really great project they just launched I think so cool if you guys check it out something else that I would mention is a company called mobile

production this is a project that we've been working on in terms of development it's basically an investment fund that is aiming to democratize movie industry so it's basically a continuous organization and when you guys invest for example you get to vote on move bunch of movies to be funded what happens afterwards is that those movies or like the selected movies are going to be funded produced and when they generate revenues those who have anews are going to be distributed back to the investors to the smart contracts something else that I should mention is a company called ferment ferment is basically the cha

tipo Father who invented continuous organizations and it's a platform for creating and investing into continuous security tokens so this is pretty much it those are my contracts I'm also going to share the presentation into the community channel and I have a bunch of sources here which you guys can see afterwards thank you thank you there is an equations I was wondering if tokens are tradable on secondary markets so if your alpha got o for example and I

buy a coffee from you can I trade it to someone else or is this always banned in the case of it's not bad oh good question by the way oh it's not bad and this is actually preferred or let's say that me is a continuous organization I wouldn't mind this happening because it's basically just like investing into equity or investing in a startup you can always sell your shares or tokens to to another person so it's just an open market it doesn't harm the organization in any way and yeah so what I was wondering is if the goal of the bonding

curve is to set the price graph in advance no wouldn't or couldn't these secondary markets emergently create a new price graph that disrupts the original one so the thing is that it wouldn't because when you sell if you sell your tokens to the continuous organizations it burns the tokens and therefore the supply reduces and the price goes down however if you just transfer them to another wallet which would be the case if you sell them to your friend they wouldn't be burned so the the price wouldn't be affected it would just be you getting out and somebody else getting in have you looked into shorting on bonding

curse so you could repeat shorts learning curve shorts so you basically bet against the bonding curve we've wrote a few articles about it maybe it's interesting to you guys definitely I would be glad to chat about this later we haven't researched it in depth if you guys have researched it I would be glad to to have a chat right after this call how does it look from a legal perspective like where would you set up continuous organization it's pretty much the same as a security token okay thank you

how important do you think it is to popularize and sort of make palatable to the mainstream these new paradigms like bonding curves or will they pick up naturally on their own well to be honest I think is just another experiment at this point however I think it's a really good evolution of security tokens and dowels because it can create decentralized organizations with a sustainable funding Mo'Nique mechanism it came very well disappear never be heard of in a year or two but I think this is true for just about everything that we do as an interior community do I think let's say towels are the answer to

everything no they're just not an experiment if we really really practical so this could be a great funding mechanism so and it's let's say more sophisticated security token so it's essentially alongside apart paradigm of security tokens and whether or not whether or not those pick up we don't know we see now that it for the TVM community it works great we working on a couple projects with that hoping that those pick up however do I think that is going to become mainstream I have no idea basically we're still experimenting as a community well maybe a better way to ask the question is can a mainstream let's say it does pick up a mainstream user

probably wouldn't understand the incentives that make this bonding curve work so I was wondering like how can you really participate in this sort of funding model if you don't understand that you might not want to short at this time and the direction that the curve would go sure great question so I'm not sure that the mainstream needs to know about the bonding curve or it can be created through basically a Fiat on-ramp but where people invest money and they receive their tokens they invest fiat money and they receive their tokens and basically I'm pretty sure that as with everything that we do or it can be explained in too non wetly or non blockchain always

however it's still very the concept of tokens itself it's still very wet pitting so if you could get around with tokens you could get around with that however I do think that is to a barrier which is to tokenization overall and not only continuous organization thank you thank you is it a project pretty nice I've heard of the use case but never

researched it but I will make sure to check it thanks for that it's a great use case like anything you can just bet on something going viral early on and then profit on it if it really picks up thank you guys [Applause]