Crypto Token Amount Computation via Bonding Curve Segmentation
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Solution Overview
Problem
The conventional bonding curve system in cryptocurrency transactions lacks a fixed exchange ratio between tokens, making it difficult for users to accurately estimate the amount of second type tokens needed for a given amount of first type tokens due to its non-linear nature and supply-dependent start and end points, which complicates precision in user transactions.
Innovation Solution
An approximation algorithm is used to estimate the first amount of first type tokens based on the indicated second amount, allowing for transactions to be processed efficiently by integrating the bonding curve from the current supply size to the increased supply size, with the option to adjust for flexibility and accuracy, and the bonding curve is segmented into simpler polynomial segments for quicker computation.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If the bonding curve is used for token exchange, then flexibility in price adjustment is improved, but measurement precision of token amounts deteriorates
Solution Approach 1:
The bonding curve is divided into multiple linear segments, where each segment connects two points on the curve and represents a specific price range. This segmentation transforms the complex non-linear curve into a series of simple linear relationships, enabling precise calculation of token amounts while preserving the overall flexibility of the bonding curve for price adjustment.
2Measurement precision
If the integral of the bonding curve is computed exactly, then measurement precision of token amounts is improved, but computation time increases
Solution Approach 1:
By segmenting the bonding curve into linear pieces, the complex integral computation is replaced with simple arithmetic operations on each segment. This allows for exact token amount calculations without requiring time-consuming numerical integration or calculus operations.
Solution Approach 2:
The patent uses pre-computed segment data that can be quickly referenced and discarded after use. Each segment's parameters are calculated once and stored, then rapidly applied during token exchange operations without requiring repeated complex computations.
3Measurement precision
If on-chain computation is performed for token amount estimation, then measurement precision is improved, but resource intensity increases
Solution Approach 1:
The computationally intensive task of bonding curve integration is extracted from the blockchain environment and performed off-chain. The segment parameters are pre-computed externally, and only the lightweight segment lookup and arithmetic operations are executed on-chain, dramatically reducing resource intensity while maintaining precision.
4Manufacturing precision
If the bonding curve integration is performed with fixed start and end points, then manufacturing precision of token amounts is improved, but adaptability to dynamic supply changes deteriorates
Solution Approach 1:
The segment parameters are designed to dynamically adapt to changing token supplies. As the total supply changes, the relevant segments are automatically selected or reconfigured to reflect the new supply state, maintaining both precision in token amount determination and adaptability to dynamic market conditions.
Data Source
AI summary
A computer-implemented method for maintaining crypto tokens of a first type. A creation and annulment procedure are implemented that may integrate a bonding curve and a fee term starting from the current supply size to a new supply size to determine an amount of crypto tokens of a second type. A creation request for creating crypto tokens of the first type may indicate a second amount of second type crypto tokens. A corresponding amount of first type crypto tokens may be computed by estimating the first amount.