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["Terra Classic Burn and Stake Enterprise (BASE) via Community based Token Bonding Curves Warning: The authors of this document are NOT financial advisers. Nothing contained in this document is intended to be taken as financial advice. One should consult a qualified financial adviser before allocating any sum of money to the BASE Project. Authors: LBUN Project Team lbunproject@gmail.com BASEswap dApp (https://baseswap.netlify.app/ Whitepaper for BASE on Terra Classic version v05 – 29 May 2023 ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Introduction Terra's UST and LUNA collapsed in the spring of 2022 resulting in devasting consequences for the digital currency space. It is estimated that a whooping $60 billion were wiped across various crypto projects. Among the hardest hit was the community that supported Terra's ecosystem. Investors lost their entire funds within a few days’ time. Terra LUNA's founders abandoned the project when they were unsuccessful in restoring the ecosystem. However, the community refused to give up hope and rallied together in a massive effort to restore the newly named LUNC. Over the next few months, many teams have put in countless hours working towards planning, proposing solutions and starting the burning of the excess LUNC in circulation. During September, some exchanges started to burn LUNC based on the 1.2% proposal that was voted on by the community. However, there has been a realization that some exchanges will follow a different path by either not participating or burning a smaller amount. This results in the community being at the mercy of the exchanges as they have a larger \"say\" then the community. Token burning has become an increasingly popular mechanism in the cryptocurrency space as a way to reduce token supply, increase value, and incentivize HODLing. However, some token burning methods may require the cooperation of centralized entities, such as exchanges, to facilitate the process. In contrast, the LBUN Project has developed an alternate method of burning LUNC, through the use of a token bonding curve (TBC) for the Burn and Stake Enterprise (BASE) token. The TBC mechanism allows for the collection of a 4.8% tax on each buy/sell of the BASE token, which is used to fund both investor returns and the purchase of LUNC on Terra Classic for burning. This innovative approach not only accelerates the burning of LUNC but also provides developer funding to encourage the return of utility to the blockchain. By using a decentralized method of token burning, the LBUN Project can maintain control over the process while avoiding the reliance on centralized entities. The LBUN Project has also taken steps to expand its token burning mechanism to other blockchain networks. Since September 2022, the LBUN Project has been running an accelerated burning dApp on Solana, and it has recently expanded its burning mechanism to Terra2 as well. These efforts demonstrate the LBUN Project's commitment to finding new and innovative ways to burn its token and provide value to its community members. As the cryptocurrency space continues to evolve, it will be interesting to see how other projects adapt and innovate to meet the changing needs of their communities. Project Goals The BASE Project has three simple goals: 1. Raise funds to facilitate utility expansion on Terra Classic 2. Accelerate the burning of LUNC to increase value 3. Reward supporters of the BASE project (via Staking rewards) ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Token Bonding Curve Basics The token bonding curve (TBC) mechanism is implemented by a smart contract that creates its own market without relying on exchanges. TBCs manage the buying and selling of \"Continuous Tokens\" (price is continuously calculated) with a mathematical formula that defines a relationship between price and token supply. When a person has purchased the token, each subsequent buyer will have to pay a slightly higher price for each token. As more people find out about the project and buying continues, the value of each token gradually increases along the bonding curve. The adaptive supply of a Continuous Token (tokens are newly minted when purchased and removed from circulation when sold) is a unique and enabling feature which allows for the supply to adjust to demand and for tokens to be continuously available for purchase at predictable prices. Bonding curves are built upon one of the most fundamental concepts in economics: price being a function of supply and demand. This tried and tested economic law is the complex study of a more familiar adage: an asset is only worth what someone is willing to pay for it. Unlike stock markets where a single conversion can spike a stock arbitrarily higher or lower than its current price, the TBC is purely automated by the current state of “supply & demand”. Traditionally, the process is overseen by a centralized entity; someone who oversees incoming buy and sell orders while matching market participants and ensuring liquidity. TBCs can be designed with separate buy and sell curves to implement a spread between the two. The spread between the two curves results in funds raised by the community for use in achieving its goal. Some communities avoid the added complexity of implementing two curves by instituting a Tax on Buys and/or Sells. This alternative method of raising funds allows for more streamlined operations by simplifying the calculations required. To summarize, the following are a list of TBC properties: 1. Instant liquidity. Tokens can be bought or sold instantaneously at any time as liquidity of its token is immediate and guaranteed. The TBC acts as an automated market maker holding enough reserves to buy tokens back at all times. 2. Continuous fundraising as the community can permissionlessly buy and sell the bonded tokens at any time. 3. Deterministic/continuous price - buys and sells are conducted at predictable prices based on a mathematical formula. The price of the current token is more than the last token issued, but less than the next token issued. 4. Limitless supply - There is no limit to the number of tokens that can be minted The most fundamental advantage of Bonding Curves over traditional asset pricing mechanisms is that the pricing of assets is transparent, defined, and immutable at all stages. The TBC is able to reach the equilibrium of consensus through clearly defined rules, without third-party intervention. TBCs offer an innovative solution because they do not require the oversight of a centralized entity to create, oversee, and enforce the market’s pursuit of this equilibrium. The BASE Project utilizes the reference “CW-20 bonding” smart contract developed by the CosmWasm development team. It can be found on the CosmWasm github in the “cw-tokens” repository. ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users BASE implementation BASE Bonding Curve (AMM) The BASE token is implemented using the “CW-20 bonding” smart contract. The assumptions are that there will be 200 million BASE tokens (Supply) minted on demand and the price of each BASE token in LUNC (Reserve) will increase as more BASE is minted. BASE's TBC is defined by the following points: The following chart illustrates the BASE bonding curve. The curve is well known in the business/scientific fields as the “Sigmoid” curve. It shows a project's growth over time, with a slow start, rapid growth, and eventual leveling off. Supports can use it to make informed decisions about where to invest their money. If a project is in the rapid growth phase, it may be a good time to invest for high returns, while a project in the maturity and stability phase can provide a stable return on investment. It is important to note that community activity is the only method of moving along the curve as this is a fund-raising effort. It is expected that the BASE price point will continuously move thereby generating the funds to support the community driven LUNC burn. LUNC Price = 0.00009 $ BASE Supply Price (LUNC) Price (USD) Reserve (LUNC) Reserve (USD) 0 0 0 0 0 25,000,000 120 0.01080 $ 502,039,950 45,183.60 $ 30,000,000 180 0.01620 $ 1,252,039,950 112,683.60 $ 32,000,000 280 0.02520 $ 1,712,039,950 154,083.60 $ 34,000,000 378 0.03402 $ 2,370,039,950 213,303.60 $ 36,000,000 504 0.04536 $ 3,252,039,950 292,683.60 $ 38,000,000 651 0.05859 $ 4,407,039,950 396,633.60 $ 40,000,000 1,000 0.090 $ 6,058,039,950 545,223.60 $ 42,000,000 1,500 0.135 $ 8,558,039,950 770,223.60 $ 45,000,000 2,500 0.225 $ 14,558,039,950 1,310,223.60 $ 47,500,000 4,000 0.360 $ 22,683,039,950 2,041,473.60 $ 58,000,000 15,000 1.35 $ 122,433,039,950 11,018,973.60 $ 61,000,000 18,000 1.62 $ 171,933,039,950 15,473,973.60 $ 65,000,000 22,000 1.98 $ 251,933,039,950 22,673,973.60 $ 69,000,000 25,000 2.25 $ 345,933,039,950 31,133,973.60 $ 74,000,000 27,500 2.48 $ 477,183,039,950 42,946,473.60 $ 80,000,000 29,500 2.66 $ 648,183,039,950 58,336,473.60 $ 87,000,000 31,000 2.79 $ 859,933,039,950 77,393,973.60 $ 95,000,000 32,000 2.88 $ 1,111,933,039,950 100,073,973.60 $ 100,000,000 32,500 2.93 $ 1,273,183,039,950 114,586,473.60 $ 110,000,000 33,000 2.97 $ 1,600,683,039,950 144,061,473.60 $ 150,000,000 33,500 3.02 $ 2,930,683,039,950 263,761,473.60 $ 200,000,000 34,000 3.06 $ 4,618,183,039,950 415,636,473.60 $ ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Mining BASE Tokens The SEC has stated that proof-of-work (POW) coins/tokens (such as Bitcoin) are a commodity and therefore are outside the SEC's jurisdiction. However, proof-of-stake (PoS) could be classified as \"investment contracts\" subject to securities laws. This would entail extensive disclosure requirements and adherence to consumer protection regulations. The BASE token has adopted a POW blockchain (base_chain) where approved miners generate blocks and create BASE tokens. Once created, the BASE tokens are transferred to the Terra Classic POS blockchain for swaps and utility. To avoid reinventing the wheel, The LBUN Project has selected the Multichain platform to create and manage the POW base_chain. MultiChain (fork of Bitcoin Core) is a ready-to-use platform that simplifies the creation and implementation of private blockchains within organizations. It addresses a major challenge faced by blockchain technology in the financial sector by providing an easy-to-use solution with privacy and control features. MultiChain supports various operating systems and offers a user-friendly interface similar to Bitcoin Core software. To ensure fair mining in private blockchains, MultiChain introduces a concept called \"mining diversity.\" This feature restricts the number of blocks that can be created by a single miner within a specific time frame. By enforcing a round-robin schedule, where permitted miners take turns creating blocks, the network remains secure and decentralized. The mining diversity parameter determines the strictness of this scheme, with higher values being safer but too close to 1 potentially causing network issues. MultiChain’s native currency is be used for block rewards to miners. One unit of native currency is given for each new block a miner creates. Therefore, the total number of native currency the miner holds is equal to the number of blocks they have created. Miners transfer this native currency to the admin node in order to swap for BASE tokens. The admin node burns the native currency and then sends a transaction to the smart contract on Terra Classic to pay the miner BASE tokens. The reward to miners at the start of the private blockchain is 20 BASE tokens per unit of native currency. However, it is expected that fewer than 20 BASE tokens per unit of native currency will be issued in the future as the price of BASE increases. Currently, miners can claim rewards immediately. However, they will be subject to the same 21-day unstaking period as regular buyer and sellers. There is a “mining setup guide” link as well as a “cloud mining guide” link available on the pinned post of the Twitter account. Mining Tokenomics In addition to the standard 0.5% chain tax, miners will pay a 5% tax when claiming mining rewards. This tax is used to pay for the bridging between the two blockchains and any associated smart contract fees. ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Staking Rewards LUNC staking provides a passive income stream by pooling tokens from supporters, staking them, and reinvesting the funds into the token bonding curve to raise the BASE token price. The APY is based on the LUNC reserve within the TBC and BASE supply, with an estimated rate at the time of writing of: *Every attempt will be made to keep the APY as high as possible utilizing a subsidy paid by the LBUN Project Team (max cap of 2.2M LUNC/day). There are no guarantees that the APY will meet the above values and the actual value may change at any time due to funding constraints. Liquid Staking via BASE (about two months after launch) One of the disadvantages of staking coins is that there exists a 21-day un-staking period. This limitation is enforced by the Terra Classic blockchain as a measure of security against rogue validators. The BASE token will provide the ability for the community to skip the 21-day un-staking period and collect their LUNC in a shorter timeline. This feature is called “Liquid Staking” and has two main benefits. 1. The BASE holder can immediately convert back to LUNC (using the dApp) in order to utilize their LUNC for another purpose. Arbitrage traders will help equalize the price of BASE between the regular staking reserves and the liquid LUNC in the dApp. 2. The BASE holder can swap BASE for any other token (via a liquidity pool) to invest in another project while maintaining their original LUNC staked. When the LUNC is to be un-staked, the holder can swap back to BASE in order to claim their LUNC back. Tokenomics (BASE Tax) The Buy/Sell Tax (4.8%) is split into 4 parts to meet the project’s goals. The “Yield” portion will be used to provide a stream of income to supporters. The “Burn” portion will be used to burn LUNC in accordance with the community’s wishes. The “Social” & “Expense” amounts are to be used to support communication, hardware and software requirements. APY LUNC Reserve LUNC Added Daily 100.00% 100,000,000 273,973 80.00% 200,000,000 438,356 60.00% 300,000,000 493,151 40.00% 500,000,000 547,945 30.00% 1,000,000,000 821,918 17.50% 10,000,000,000 4,794,521 15.10% 50,000,000,000 20,684,932 14.80% 100,000,000,000 40,547,945 ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users References What Really Happened To LUNA Crypto?, by: Forbes https://www.forbes.com/sites/qai/2022/09/20/what-really-happened-to-luna- crypto/#:~:text=When%20the%20Luna%20crypto%20network,assets%20stored%20in%20a%20bank Token Bonding Curves Explained, by: Justin Goro https://medium.com/coinmonks/token-bonding-curves-explained-7a9332198e0e Bonding Curves Explained, by: Yos Riady https://yos.io/2018/11/10/bonding-curves/ How to Make Bonding Curves for Continuous Token Models, by: Slava Balasanov https://blog.relevant.community/how-to-make-bonding-curves-for-continuous-token-models-3784653f8b17 Bonding Curves In Depth: Intuition & Parametrization, by: Slava Balasanov https://blog.relevant.community/bonding-curves-in-depth-intuition-parametrization-d3905a681e0a Converting Between Bancor and Bonding Curve Price Formulas, by: Billy Rennekamp https://billyrennekamp.medium.com/converting-between-bancor-and-bonding-curve-price-formulas- 9c11309062f5 The Augmented Bonding Curve, Part 1: A Web3 Way to Fund Public Goods, by: Commons Stack https://medium.com/commonsstack/the-augmented-bonding-curve-part-1-a-web3-way-to-fund-public-goods- 7c9d1a871ae2 Deep Dive: Augmented Bonding Curves, by: Abbey Titcomb https://medium.com/giveth/deep-dive-augmented-bonding-curves-3f1f7c1fa751 Sponsored Burning for TCR, by: Alex Van de Sande https://avsa.medium.com/sponsored-burning-for-tcr-c0ab08eef9d4 How Token Bonding Curves Help Bootstrap an Economy, by: RLY Network https://rly.network/how-token-bonding-curves-help-bootstrap-an-economy/ Bonding Curves, by: Strata Protocol https://docs.strataprotocol.com/learn/bonding_curves Sustainable & Ethical Design for Token Ecosystems, by: Token Engineering Commons https://tecommons.org/ What are Bonding Curve Offerings?, by: @tradingbull https://hackernoon.com/what-are-bonding-curve-offerings-xi2k34bm Social Tokens and US Securities Law, by: Strata Protocol https://blog.strataprotocol.com/us-social-token-law An introduction to bonding curves, shapes and use cases, by: Veronica Coutts https://medium.com/linum-labs/intro-to-bonding-curves-and-shapes-bf326bc4e11a Solana vs. Ethereum: An Ultimate Comparison, by: Iulia Vasile https://beincrypto.com/learn/solana-vs-ethereum/ Strata Protocol Riptide Hackathon Submission 2022 (video), by Strata https://www.youtube.com/watch?v=xZUhb06JKM0 ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Appendix Alpha: Tokens and US Securities Law The Securities Act of 1933 and the Securities Exchange Act of 1934 impose strict regulations on the sale of \"securities,\" defined broadly to include a wide range of instruments, including \"investment contracts.\" The U.S. Supreme Court formulated what came to be called the \"Howey test\" (a set of four factors). If all four factors are present in a given instrument, it's an investment contract (and thus a security). The four factors are: 1. An investment of money, 2. In a common enterprise, 3. With a reasonable expectation of profit, 4. Derived solely from the entrepreneurial or managerial efforts of others The primary motivator to buy and sell BASE is to provide funds for development and for the burning of LUNC tokens. Community members interact with the smart contract to buy and sell BASE and in turn donate 4.8% towards the project's goals. The more BASE transactions the community makes; the more funds are raised for the benefit of the community. Buy or Sell transactions will incur the same 4.8% burn no matter where the price of BASE is located on the curve. Other than fundraising, the purchase of tokens provides the ability for community members to participate in raffles as a reward for holding BASE. The raffle winner will get 25% of all transaction fees collected since the last raffle. The TBC smart contract is deployed on-chain and operates autonomously. The smart contract follows a decentralized model and there is no person or promoter that is managing its operation. The TBC simply follows the mathematical formula automatically based on inputs and outputs by the community. Further, there is no person making any marketing efforts or providing materials to show reasonable expectations of profit. If the community stops supporting the TBC, its functionality ceases to exist due to the fact that community involvement is required. Any increase in the value of the BASE token is strictly the result of community activity. Community members must understand that there are no entrepreneurial or managerial efforts provided by \"others\". The TBC is designed to be \"sufficiently decentralized ... where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts\". Stated another way, there are no Active Participants (\"AP\") that serve as \"a promoter, sponsor, or other third party\" to reasonably rely on for their profit. Community participants SHOULD NOT EXPECT TO GAIN ANY PROFIT from this project. In fact, community members should expect a minimum loss of 9.6% (4.8% Buy tax plus 4.8% Sell tax). In other words, community members are contributing 9.6% to the fundraiser. No AP is available for: 1. the development, improvement (or enhancement), operation, or promotion of the network. BASE is an open-source project on github where anyone can make improvements. 2. to perform essential tasks or responsibilities. Instead, an unaffiliated, dispersed community of participants (a \"decentralized\" network) should perform those actions. 3. creation or supporting a market for, or the price of, the digital asset. Individuals that undertake those actions do so for the benefit of themselves only. 4. to function as a lead or central role in the direction of the ongoing development of the network or the digital asset. See #1. 5. filling a continuing managerial role in making decisions about or exercising judgment concerning the network or the characteristics or rights the digital asset represents. This is a DeFi project. 6. the community participants to reasonably expect to undertake efforts to promote its own interests and enhance the value of the network or digital asset. Individuals that undertake those actions do so for the benefit of themselves only. ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users Appendix Bravo: FAQs 1) Must I HODL BASE in order to benefit the community? a. No. One can buy BASE and then sell immediately. This will still generate a total of 9.6% towards the goals of the project. 2) I want to help, but I just want to give a one-time contribution. How can I do that? a. Make a BASE purchase and just leave it in your wallet forever. Most wallets allow you to hide the token so you don’t have it cluttering up your wallet. 3) Can I pay for things with BASE? a. Technically yes – but the other party will have to sell the BASE to the TBC in order to swap it for LUNA, and then swap for LUNC, BTC, ETH, etc. 4) How can I get other people (not LUNC community) to pay the 4.8% tax in order to help our community? a. Send them BASE instead of other currencies. That way they will have to pay the sell tax to get the currency they really want (BTC, ETH, etc). 5) Will I make money with BASE? a. Most likely not. BASE is for contributing to the health of the LUNC ecosystem. Any BASE you sell will be at the current TBC price. Therefore, if the current price is higher than when you bought… well you draw your own conclusion. However, nobody knows where that point will be on the curve ahead of time because it all depends on community involvement. One thing is for certain - you should NOT buy BASE with money that you cannot part with. This is crypto and the risk is extremely high that you will lose a part or all of your money. One last warning about crypto Currency Putting money towards crypto currencies or projects is extremely risky. Before you buy BASE (or any other crypto) ask yourself: 1) Did I pay the mortgage (or rent) and my monthly car payment? 2) Did I pay all of my monthly bills? 3) Did I pay for food for myself as well as for all my dependents? 4) Did I pay my medical bills? 5) Did I pay for my car or home repairs? 6) Did I pay my child support? 7) Did I contribute to my retirement fund? 8) Did I contribute to my child/children’s college fund? 9) Did I put any money away into a safe (low risk) instrument? 10) Did I pay my taxes? Did I pay for everything I am responsible for? If the answer to ANY one of those questions is “No”, then DO NOT BUY BASE. Instead, go pay for the things that you are responsible for. ","Apr 2023 Funding Devs - Burning LUNC – Rewarding Users How $BASE Works "]