The price curve of creator tokens
Last updated
Last updated
Creator tokens are scarce, and the system allocates 1 million by default . As more and more people buy creator's " creator tokens", the price of the tokens will rise faster and faster . Below is a graph of the price change of Creator Tokens as a function of the amount of Creator Tokens in circulation in a given account.
According to the price curve above, as more and more tokens are purchased, it becomes more and more expensive. The funds that users use to buy tokens are "locked" in the account in exchange for tokens. On the other hand, if a user wants to sell tokens, the account uses locked funds from previous purchases according to the curve. Thus, buying generates tokens while pushing up the price and locking funds in the account, while selling destroys tokens while lowering the price and unlocking funds from the account. This is often referred to as an "automated market maker" and is the same concept that powers protocols like Uniswap and Bancor .