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Update 003_depth_bump.md

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Will Ruddick 2020-05-15 06:08:48 +00:00
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spec/003_depth_bump.md
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@ -7,7 +7,7 @@ Version: 0.0.3
## Rationale ## Rationale
The reserve on the Bancor contracts will never grow far beyond the Target Reserve Ratio point as holders will sell off the CICs and remove the reserves beyond it. The reserve on the Bancor contracts will never grow far beyond the Target Reserve Ratio point as holders will sell off the CICs and remove the reserves beyond it.
Giving people the option to add reserve and mint an equal amount of tokens (without a price change) would be a way to increase the overall liquidity. Giving people the option to multiply the reserve and supply tokens with the same multiple (without a price change) would be a way to increase the overall liquidity.
But because that would give an advantage to liquidity providers when the CIC price is above 1:1 we need to ensure that excess tokens are given to the community. But because that would give an advantage to liquidity providers when the CIC price is above 1:1 we need to ensure that excess tokens are given to the community.
(note that a depth shrink could also be created ) (note that a depth shrink could also be created )
@ -20,7 +20,7 @@ the price of the token will shoot up and CIC sell offs will cause the reserve to
## After ## After
We would need to be able to mint tokens and the reserve outside of the bonding curve in a controled way. We would need to be able to mint tokens and the reserve outside of the bonding curve in a controled way.
The idea would be to keep the CIC price 1:1 with reserve and increase both reserve and supply equally (off the curve) The idea would be to keep the CIC price 1:1 with reserve and increase both reserve and supply equally (in multiple) (off the curve)
Excess tokens created in this process (beyond those minted along the bonding curve) should be given to a specific address designated in the Converter constructor. Excess tokens created in this process (beyond those minted along the bonding curve) should be given to a specific address designated in the Converter constructor.
A donor in this case can choose to always get back as many CICs as they add to reserve - with no speculative advantage. A donor in this case can choose to always get back as many CICs as they add to reserve - with no speculative advantage.
@ -28,7 +28,8 @@ A donor in this case can choose to always get back as many CICs as they add to r
### Workflow ### Workflow
* A public depthBump Funcation is added to the converter contract which takes in reserve R1 and mints an equal amount of tokens T1 * A public depthBump Funcation is added to the converter contract which takes in reserve R1
* Calculate the multiple to teh reserve (R1/R0) and mint an amount of tokens T1 = T0(R1/R0) - Where R0 and T0 are the inital amount of reserve and supply
* Calculate the amount of tokens (Tc) that would have been created on the bonding curve due to R1. * Calculate the amount of tokens (Tc) that would have been created on the bonding curve due to R1.
* If the tokens T1 > Tc then Te = (T1-Tc) and Te goes to a desginated wallet (Community Pool) and Tc goes to whomever added the R1 (thus not giving the liquidity provider a advantage) * If the tokens T1 > Tc then Te = (T1-Tc) and Te goes to a desginated wallet (Community Pool) and Tc goes to whomever added the R1 (thus not giving the liquidity provider a advantage)
* If the tokens T1 <= Tc then T1 goes to whomever added the R1 (in this case the liquidity provider takes a loss) * If the tokens T1 <= Tc then T1 goes to whomever added the R1 (in this case the liquidity provider takes a loss)