Etherlite IBCO — A fair token sale model, starts on May 15, 2021

3 min readMay 14, 2021

Initial Bonding Curve Offering (IBCO), is a new primitive for crypto projects funding which solves some of the classic problems of ICOs, such as lack of accountability and liquidity, or imperfect price discovery mechanisms for the token when placed on the market.

To understand, the IBCO creates tokens when people buy and destroys tokens when people sell those back. This creates a continuous burning mechanism which does not allow for token inflation if the price does not grow, and decreases supply if the price goes down. At first sight, the token creation by the IBCO could be seen as an infinite inflation machine that will harm the price but actually the mechanism is quite different: the formula controlling the IBCO ensures that for each price increase, the amount of tokens minted decreases exponentially.

The token sale therefore, takes the shape of what is called an Initial Bonding Curve Offering (IBCO), which features several unique features that make it a far safer investment than typical ICOs, such as:

  • Guaranteed liquidity, so you can always buy or sell
  • Market-driven price discovery, with price determined by true market demand.
  • Flexible supply that burns tokens or creates new ones, depending also on market conditions, to protect value.

What’s wrong with ICO’s ?

Flawed price discovery mechanics: during the ICO the price of the token is arbitrarily fixed by the promoters of the project, if investors wants to participate they have to rush in a limited amount of time and buy at that
price, in the meanwhile they — similarly to the promoters — have 0 signal from the market to understand if the token is overpriced or underpriced.

Etherlite IBCO Key Features

In the EtherLite IBCO when you buy a token, each subsequent buyer will have to pay a slightly higher price for each xETL token. As more individuals are interested in the project and start investing in the xETL token, the value of each token progressively increases along the bonding curve. This gives you the first-mover advantage.

Bonding curve offering is a smart contract created to give tokens a market by making buy and sell functions. To get xETL on EtherLite Chain user need to send ETH or USDT or BNB to the smart contract on EtherLite Chain, which calculates the average price of the token determined by the smart contract by following the linear curve formula.

‌Price Calculation Per Transaction

The actual price of xETL is calculated as a function of the transaction size. The reference formula for price calculation is as follows:

A Method for Price Discovery

xETL utilizes a novel method for price discovery which is based on “Constant Reserve Ratio (CRR)”. The CRR is set for each reserve token and used in price calculation, along with the xETL current supply and reserve balance, In the following way:

Referral Program

EtherLite also introduced its referral program where a person who refer EtherLite IBCO/ICO to their friends get 5% Extra coins in Reward, when they buy. Agency fees of 5% will be provided to marketing agencies supporting the campaign.

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