Capital Pool: Bonding Curve Overview

The Fairside protocol leverages a bonding curve mechanism to enabling continuous liquidity for payouts while benefiting contributors of the curve by growing the network and coverage membership sold.

Two primary factors can influence $Fair's price via the bonding curve mechanism: the current reserve and how the reserve is utilized. Although the relationship isn't straightforwardly linear, it's recognized that increased reserve usage(Network FShare) can boost the protocol's revenue and, in turn, augment the reserve. However, this may also necessitate locking the reserve balance to ensure memberships are safeguarded within acceptable risk management guidelines.