Neuchatel, Switzerland — Swarm Network, a pioneering decentralized storage and communication service, today announced the completion of its ambitious Swarm 2.0 roadmap. This marks a significant milestone with the shutdown of the bonding curve mechanism scheduled for May 4, 2024, at 12:00 PM, heralding a new era of tokenomics designed to enhance network efficiency and user engagement.
Decisive Community Action
Following a decisive community vote, where the majority overwhelmingly supported the removal, Swarm Network is set to implement changes that reflect its commitment to community-driven governance and sustainable economic policies. This move is part of broader enhancements in Swarm 2.0 that include the integration of erasure coding to fortify network resilience and the introduction of a self-sufficient price oracle.
Understanding the Bonding Curve
The bonding curve is a mathematical function designed to automatically adjust the token price based on its supply, offering a transparent and predictable pricing mechanism. Initially deployed to enhance resilience against price manipulation and establish a fair distribution system that discourages inflation, the bonding curve ensures token availability for purchase regardless of market supply and demand.
Reflections on the Bonding Curve
Elad Verbin (Lead Scientist, Lunar Ventures), shared insights on the impact of bonding curves: “Bonding curves are crucial for smoothing out price volatility, especially beneficial for assets with lower liquidity. By requiring significant financial input to impact the price substantially, they offer a more stable pricing mechanism compared to traditional order book-based markets.”
However, Elad also noted significant drawbacks, such as the inefficient lock-in of capital, which could otherwise be utilized within the ecosystem. Moreover, while the mechanism stabilizes downward price volatility, it may dampen upward price movements, potentially making the token less attractive to investors seeking dynamic market engagement.
Moving Forward
With the bonding curve shutdown, Swarm Network is poised to leverage its enhanced tokenomics to foster greater trust and participation within its community. This strategic shift is expected to attract new users and investors, driving the next phase of growth and innovation in the decentralized space.
About Swarm Network
Swarm is dedicated to providing a secure, decentralized platform for digital storage and communication, emphasizing user control and data privacy. It was created by the Ethereum Foundation in 2015 as part of the world computer vision. After 5 years of R&D under the Ethereum Foundation, Swarm graduated, implementation began in 2020 and the Swarm Foundation was established in 2021. In 2023, the Swarm network grows by more than 250% and Swarm 2.0, a massive upgrade, is on the pipeline.
Useful links:
- Swarm and its “Bzzaar” Bonding Curve https://blog.ethswarm.org/foundation/2021/swarm-and-its-bzzaar-bonding-curve/
- The CryptoOracle Webinar “Rethinking Bonding Curves” hosted by Lou Kerner https://www.youtube.com/watch?v=43x-GxCO9K8
- Recap on the Webinar “Rethinking Bonding Curves” https://blog.ethswarm.org/foundation/2024/rethinking-bonding-curves/
- Snapshot voting page: https://snapshot.org/#/swarmfoundation.eth/proposal/0x28b308188ed7afba140ac5629b2aff4d6b6012b400403468e595d4af0549cdbd
- Bonding Curve voting AMA- https://blog.ethswarm.org/foundation/2024/bonding-curve-voting-ama/
- Your Voice Matters: How to Vote in the Swarm Bonding Curve Community Vote https://blog.ethswarm.org/foundation/2024/your-voice-matters-how-to-vote-in-the-swarm-bonding-curve-community-vote/
