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["Terra Classic Dev Funding & LUNC Burning 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 LBUN Project. Authors: LBUN Project Team lbunproject@gmail.com LBUNswap dApp (https://lbunswap.netlify.app/ Whitepaper for LBUN on Terra 2 version v03 ","Jan 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. This paper will present an alternate method of burning LUNC at an accelerated rate while being totally controlled by the will of the community members. In addition, this method will provide developer funding to encourage the return of utility to the blockchain. This solution is realized by utilizing a token bonding curve (TBC) that will collect 4.8% tax on each buy/sell of the LUNC Burn Token (LBUN). The 4.8% tax will be split to provide funds for developers and to buy LUNC on Terra Classic for destruction by the burning mechanism. The end result is that twice the amount of LUNC is burned without relying on the cooperation of exchanges (or any centralized entity) and a matching amount of funds goes to supporting developers as they build the next generation of dApps. Our team envisions dApps on many blockchains that funnel funds back to Terra Classic for rebuilding the blockchain. Our goal is cooperation not competition. This will enable users of other blockchains to provide support for Terra Classic even if they do not use Terra Classic. The LBUN Project has been running an accelerated burning dApp on Solana since Sep 2022. The deployment of LBUN’s new dApp on Terra Classic and Terra 2 are an important step towards generating utility on the Terra ecosystem. All funds raised from the Terra 2 dApp will be utilized solely on the Terra Classic blockchain. Project Goals The LBUN 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 LBUN project (via Raffles) ","Jan 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 LBUN 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. ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users 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 LBUN is to provide funds for development and for the burning of LUNC tokens. Community members interact with the smart contract to buy and sell LBUN and in turn donate 4.8% towards the project's goals. The more LBUN 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 LBUN 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 LBUN. 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 LBUN 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. LBUN 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. ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users LBUN implementation LBUN Bonding Curve The LBUN token is implemented using the “CW-20 bonding” smart contract. LBUN's TBC is defined by the following mathematical formula:   = (0.000001) ∗  2 The formula is a power function and as such can define our TBC in terms of a reserve ratio. This greatly simplifies the math needed to compute how much liquidity is stored in the Reserve. For LBUN’s TBC, the applicable math is as follows:   = ( 1 3 ∗  3 ) ( 2 ∗ ) = 1 3 In other words, the liquidity reserve for LBUN is one-third of the Market Cap (see Bancor Whitepaper or article by Slava Balasanov for complete explanation). For example: at a 100,000 LBUN supply, the TBC price is 10,000 LUNA/LBUN: • Market Cap is (100,000 LBUN * 10,000 LUNA/LBUN) = 1,000,000,000 LUNA • Liquidity Reserve = (1/3 * 1,000,000,000 LUNA) = 333,333,333 LUNA A summary of data points for a LBUN supply from 1,000 to 100,000 tokens follows: LBUN Supply Price (LBUN/LUNA) Market Cap (LUNA) Liquidity Reserve (LUNA) 1,000 1 1,000 333 5,000 25 125,000 41,667 10,000 100 1,000,000 333,333 15,000 225 3,375,000 1,125,000 20,000 400 8,000,000 2,666,667 25,000 625 15,625,000 5,208,333 30,000 900 27,000,000 9,000,000 35,000 1,225 42,875,000 14,291,667 40,000 1,600 64,000,000 21,333,333 45,000 2,025 91,125,000 30,375,000 50,000 2,500 125,000,000 41,666,667 55,000 3,025 166,375,000 55,458,333 60,000 3,600 216,000,000 72,000,000 65,000 4,225 274,625,000 91,541,667 70,000 4,900 343,000,000 114,333,333 75,000 5,625 421,875,000 140,625,000 80,000 6,400 512,000,000 170,666,667 85,000 7,225 614,125,000 204,708,333 90,000 8,100 729,000,000 243,000,000 95,000 9,025 857,375,000 285,791,667 100,000 10,000 1,000,000,000 333,333,333 Token Bonding Curve (AMM) (Multiply by LUNA/USD to get dollars) ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users The following chart illustrates the LBUN bonding curve. However, remember that community activity is the only method of moving along the curve. It is expected that the LBUN price point will continuously move thereby generating the funds to support the community driven LUNC burn. Tokenomics (LBUN Tax) The Buy Tax (4.8%) is split into 5 multisig accounts to meet the project’s stated goals. The Tax breakdown is as follows: ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users The amount of funds raised can be computed by the flowing formula:   = (  3 2856000 ) ∗ 0.048 This can be summarized in the following table: The above table shows that: A circulating supply of 100,000 LBUN and a LUNA price of $2.10 (as of 17 Jan 2023), The project will have a $2.1 Billion Market Cap with $700 Million LUNA Reserve (liquidity). That results in $35 Million in funds raised for the LUNC community, to be split between developers, LUNC burns, raffle rewards as well as expenses. One other interesting point is that: The amount raised increases with an increase of the price of LUNA! Today it’s $2.10/LUNA, but what if the price goes up to $5.00, $10.00, $20.00, etc! LBUN Supply Developers LUNC Burn Raffles for HODLs Expenses Flex Total 1,000 8.82 $ 8.82 $ 8.82 $ 4.41 $ 4.41 $ 35.29 $ 5,000 1,102.94 $ 1,102.94 $ 1,102.94 $ 551.47 $ 551.47 $ 4,411.76 $ 10,000 8,823.53 $ 8,823.53 $ 8,823.53 $ 4,411.76 $ 4,411.76 $ 35,294.12 $ 15,000 29,779.41 $ 29,779.41 $ 29,779.41 $ 14,889.71 $ 14,889.71 $ 119,117.65 $ 20,000 70,588.24 $ 70,588.24 $ 70,588.24 $ 35,294.12 $ 35,294.12 $ 282,352.94 $ 25,000 137,867.65 $ 137,867.65 $ 137,867.65 $ 68,933.82 $ 68,933.82 $ 551,470.59 $ 30,000 238,235.29 $ 238,235.29 $ 238,235.29 $ 119,117.65 $ 119,117.65 $ 952,941.18 $ 35,000 378,308.82 $ 378,308.82 $ 378,308.82 $ 189,154.41 $ 189,154.41 $ 1,513,235.29 $ 40,000 564,705.88 $ 564,705.88 $ 564,705.88 $ 282,352.94 $ 282,352.94 $ 2,258,823.53 $ 45,000 804,044.12 $ 804,044.12 $ 804,044.12 $ 402,022.06 $ 402,022.06 $ 3,216,176.47 $ 50,000 1,102,941.18 $ 1,102,941.18 $ 1,102,941.18 $ 551,470.59 $ 551,470.59 $ 4,411,764.71 $ 55,000 1,468,014.71 $ 1,468,014.71 $ 1,468,014.71 $ 734,007.35 $ 734,007.35 $ 5,872,058.82 $ 60,000 1,905,882.35 $ 1,905,882.35 $ 1,905,882.35 $ 952,941.18 $ 952,941.18 $ 7,623,529.41 $ 65,000 2,423,161.76 $ 2,423,161.76 $ 2,423,161.76 $ 1,211,580.88 $ 1,211,580.88 $ 9,692,647.06 $ 70,000 3,026,470.59 $ 3,026,470.59 $ 3,026,470.59 $ 1,513,235.29 $ 1,513,235.29 $ 12,105,882.35 $ 75,000 3,722,426.47 $ 3,722,426.47 $ 3,722,426.47 $ 1,861,213.24 $ 1,861,213.24 $ 14,889,705.88 $ 80,000 4,517,647.06 $ 4,517,647.06 $ 4,517,647.06 $ 2,258,823.53 $ 2,258,823.53 $ 18,070,588.24 $ 85,000 5,418,750.00 $ 5,418,750.00 $ 5,418,750.00 $ 2,709,375.00 $ 2,709,375.00 $ 21,675,000.00 $ 90,000 6,432,352.94 $ 6,432,352.94 $ 6,432,352.94 $ 3,216,176.47 $ 3,216,176.47 $ 25,729,411.76 $ 95,000 7,565,073.53 $ 7,565,073.53 $ 7,565,073.53 $ 3,782,536.76 $ 3,782,536.76 $ 30,260,294.12 $ 100,000 8,823,529.41 $ 8,823,529.41 $ 8,823,529.41 $ 4,411,764.71 $ 4,411,764.71 $ 35,294,117.65 $ Funds Raised ( as of this writing, LUNA = $2.10 ) ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users LBUN Raffles Depending on community activity, a raffle will be held weekly to reward the LUNC community for utilizing the LBUN Project. The winner of the raffle will be awarded all of the LUNA deposited into the Raffle fund during the week. The Raffle fund grows by receiving 1.2% of the total LBUN/LUNA amount transacted (Buys and Sells) during the previous 7 days. The 1.2% funding the Raffle comes out of the 4.8% Buy and Sell tax. Therefore, the Raffle amount is likely to vary from week to week as it is generated solely by community activity in the LBUN project. This implementation creates a win-win situation (LUNC ecosystem growth = bigger Raffle winnings) for the LUNC community. All holders of LBUN will be automatically entered into the raffle that will be held immediately following the weekly LUNC burn. The wallet address of the Winner will be posted on Twitter. Holding LBUN equates to a lifetime lottery ticket that never expires! The probability of winning a raffle is based on the amount of LBUN held at the time of the raffle. Therefore, one’s odds of winning increase as more LBUN is bought and held. Wallets will be sorted based on the balance held. Sorting by wallet address will be used when multiple wallets hold the same balance. The top 10% (largest balances) will be in Group A, next 20% in Group B, next 30% in Group C and the last 40% (smallest balances) in Group D. Group A will have the highest odds of winning while Group D will have the lowest. Within each group, the odds of being selected is 1/#wallets in that group. The final odds are those two probabilities multiplied together. For example: With 75 wallets holding LBUN, the odds are as follows: ","Jan 2023 Funding Devs - Burning LUNC – Rewarding Users FAQs 1) Must I HODL LBUN in order to benefit the community? a. No. One can buy LBUN 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 LBUN 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 LBUN? a. Technically yes – but the other party will have to sell the LBUN 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 LBUN 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 LBUN? a. Most likely not. LBUN is for contributing to the health of the LUNC ecosystem. Any LBUN 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 LBUN 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 LBUN (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 LBUN. Instead, go pay for the things that you are responsible for. ","Jan 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 "]