a16z: Crypto Applications

Automated Market Making (Uniswap, Kyber Bonding Curves) Liquidity for the long tail. This is questionable as to whether it will work given presence of other markets, but people are trying. Ⓒ2020 Andreessen Horowitz. All rights reserved worldwide. S Uniswap is a protocol for automated token exchange on Ethereum. A simple smart contract interface for swapping ERC20 tokens A formalized model for pooling liquidity reserves An open source frontend interface for traders and liquidity providers A commitment to free and decentralized asset exchange Swap Tokens Read the Docs Bonding Curves A bonding curve is a mathematical curve that defines a relationship between price and token supply. Here's an example of a bonding curve, where current Price = tokenSupply: currentPrice tokenSupply This bonding curve says that price increases as the supply of the token increases. In the case of an exponential curve such as the one above, the growth rate accelerate as the number of tokens minted increases. When a person has purchased the token, each subsequent buyer will have to pay a slightly higher price for each token, generating a potential profit for the earliest investors. As more people find out about the project and buying continues, the value of each token gradually increases along the bonding curve. Early investors who find promising projects early, buy the curve-bonded token, and then sell their token back can earn a profit in the future. You can have different curve shapes to accomplish different goals and properties. Mathematical Formula a16z

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