$FAIR
Last updated
Last updated
The Fairside protocol leverages a bonding curve mechanism to facilitate funding for potential payouts. Through this mechanism, users can exchange ETH for our Consumer Protection Token, $Fair. As the protocol grows and number of the membership increases, a portion of the membership fees paid by users is distributed to the contributors participating in the bonding curve. This distribution mechanism leads to an increase in the price of $Fair, rewarding contributors for their support and participation in the protocol. On the other hand, when users suffer losses and verified by governance during claim process, a payout is required, funds are drawn from the pool accumulated by the bonding curve. This outflow can lead to a decrease in the value of the $Fair token, as the available pool of funds is reduced. Consequently, contributors might see a marginal decline in the value of their holdings during such events.
The ABC (Augmented Bonding Curve) contract is like a mathematical rulebook that decides how many $Fair tokens you get for your ETH and vice versa. It uses complex formulas to ensure that this exchange is fair and balanced.
User Interaction: A user initiates the bonding process by sending ETH to the Bonding Curve contract.
ETH Deposit: Upon receiving ETH, the Bonding Curve contract calculates the number of $Fair tokens to issue. This calculation is based on the current reserve of ETH in the contract and network fshare, as determined by the ABC (Augmented Bonding Curve) contract.
Token Issuance: The calculated number of $Fair tokens are minted (created) and allocated to the user's account. This process expands the total supply of $Fair tokens in circulation.
Funding Pool Allocation: After minting corresponding $Fair token to user, internally a portion of the deposited ETH may be allocated to a funding pool if the minimum required allocation is not reached in the funding pool(currently it is set to 500ETH). This pool serves as a reserve for various operational purposes within the Fairside ecosystem. Currently the allocation is 30% of the received ETH for bonding. In turn, if the funding pool is above the targeted 500 ETH, 100% of the bonded ETH is deposited to the curve. Thus, it doesn't have impact on the $Fair token allocation to the user since it is calculated using the entire ETH deposit user has sent.
User Interaction: A user initiates the unbonding process by burning $Fair tokens from the Bonding Curve contract.
ETH Withdrawal: Upon receiving user's unbonding request, the Bonding Curve contract calculates the number of $Fair tokens to be burnt. This calculation is based on the current reserve of ETH in the contract and network fshare, as determined by the ABC (Augmented Bonding Curve) contract.
Token Redemption: The calculated number of $Fair tokens are burnt from the user's account. This process reduces the total supply of $Fair tokens in circulation.
Tribute Fee and Rewards: During the withdrawal phase (unbonding), a tribute fee is deducted from the withdrawn ETH. This fee is used to reward existing users based on their participation, gauged by factors like holding duration and amount of $Fair held.
The remaining ETH after deducting tribute fee will be sent to user wallet to conclude the unbonding flow
