APP Tokens are representing a tokenized DAPP idea. They are bonding curve tokens that have different buy and sell curves.
Each APP token has its own bonding curve smart contract, where you can buy and sell tokens from.
The bonding curve smart contract is using mathematical formula to calculate the price as a function of supply. There are buy and sell functions, which can be used to mint and burn tokens from the smart contract. The buy and sell curve can be different.
Example of linear bonding curves with a gap between them:
There are 2 major reasons to prefer different buy and sell curves.
- 1.They can protect you from sandwich attacks, because the revenue from the attack need to outperform the difference in the price.
- 2.Difference in the price can be used for funding the development of the project represented by the token.
Let’s say we have bonding curve token X:
- 1.On purchase new X are minted by the smart contract, which increases its price. Part of the LUNAR invested goes in the project’s fund and part of it is held back by the contract in its buy-back reserve.
- 2.On sale the amount of X sold is burnt by the smart contract, which decreases the price of X, and the contract refunds the investor with LUNAR using its buy-back reserve.
- 3.The difference between buy and sell curve will go to the teams reserve.