How it Works

Slops manages early-stage token pricing and trading using an on-chain virtual Automated Market Maker (AMM) bonding curve.

1. Virtual Reserves and Price Discovery

Every bonding curve utilizes a constant product formula:

$$(V_{\text{ETH}} + R_{\text{ETH}}) \cdot (V_{\text{Token}} - S_{\text{Token}}) = k$$

Where:

  • $V_{\text{ETH}}$ (Virtual ETH Reserve): 1.5 ETH. This virtual value establishes the starting token price and prevents pricing from initiating at zero.
  • $V_{\text{Token}}$ (Virtual Token Reserve): 840,000,000 Tokens.
  • $R_{\text{ETH}}$ (Real ETH Reserve): The cumulative ETH deposited by users during buys, minus ETH paid to users during sells.
  • $S_{\text{Token}}$ (Tokens Sold): The cumulative tokens bought by users.
  • $k$ (Constant Product constant): Fixed at $$1.5 \times 840,000,000 = 1,260,000,000 \text{ ETH-Tokens}$$

2. Trading Mechanics

Users trade directly against the BondingCurve smart contract.

  • Buying Tokens: Sending ETH to the buy function increases $R_{\text{ETH}}$ and decreases the available token reserve on the curve, driving the token price up.
  • Selling Tokens: Calling sell returns tokens to the curve, decreasing $R_{\text{ETH}}$ and increasing available token reserves, which lowers the price. Before executing a sell, users must approve the bonding curve contract to spend their tokens.
  • Trading Fee: A flat 1% fee is charged on all curve buy and sell trades.

3. Token Graduation Threshold

A bonding curve is a temporary stage. The ultimate target is to accumulate 6 ETH of real liquidity ($R_{\text{ETH}} = 6 \text{ ETH}$).

Once a buy transaction pushes the real ETH reserve to 6 ETH:

  1. The buy function executes a boundary refund, returning any excess ETH to the user.
  2. The curve status changes permanently to GRADUATING.
  3. All subsequent trading is disabled on the curve contract.
  4. The contract awaits asset migration to Uniswap V4.