🥎Smart Pricing

The price of Flip NFTs is not determined by user-defined listing prices but by the Bonding Curve algorithm. In the DeFi space, the most well-known Bonding Curve is Uniswap’s classic formula: X * Y = K (where K is a constant, and X and Y are the quantities of two tokens in the pool). Broadly, a Bonding Curve is a curve; narrowly, it refers to a curve that determines pricing. The Bonding Curve algorithm used in Flip is as follows:

Where:

• initialPrice: The base price you set for the NFT

• supply: The current number of minted NFTs

• maxSupply: The maximum total supply of NFTs

When:

• supply = 0, the price is at its minimum, i.e., price = initialPrice

• supply = maxSupply, the price reaches its maximum, i.e., price = 2001 × initialPrice

Example: When initialPrice = 0.001 ETH and maxSupply = 10,000, the price ceiling approaches 2 ETH. The curve of Price vs. Supply is illustrated as shown:

Why This Curve?

The curve was designed after careful consideration of multiple factors:

1. Price Ceiling: We needed to determine a reasonable multiple for the price ceiling relative to the initial issuance price. Historical data from blue-chip NFTs shows that their floor price at peak can often reach 100x or even 1000x the issuance price. To avoid limiting upside potential, we set the price ceiling at 2000x the initial price.

2. Price Change Slope: The slope of the curve affects the rate of price changes. In the early minting stage, the price rises quickly as the NFT supply increases. In the later stage, when the price is higher, the growth rate slows, and the price increases more gradually with supply. This design allows early participants to enter at a relatively low price, while in the later stage, when supply is high and prices are elevated, price volatility is reduced, protecting late participants from rapid losses.

3. Market Factors: We also considered factors like market listing rates and their impact on pricing, ultimately finalizing the current curve formula.