The digital economy has radically changed the nature of the relationship between customers and corporations. Today's individuals have switched from being passive consumers to being an essential force in creating value, either by their actual work (think Airbnb, Uber, Apple's App Store, Amazon Marketplace...) or through their data (Facebook, Google...). By leveraging their users' work, organisations in the digital economy have the ability to create products with personalised user experiences that can sustain increasing returns to scale, thus providing investors with large returns on investments.

Unfortunately, today's organisations have no simple and efficient way to strongly align the interests of their workforce of users with the financial success of their organisation. This is mostly due to today's securities' laws that impose constraints and frictions when it comes to selling and distributing securities, especially to non-accredited investors.

To solve this issue, we propose a new paradigm: the Acxyn Continuous Organization (ACO), a new type of organisation designed to align the stakeholders' interests significantly better than in traditional organisations. An Acxyn Continuous Organisation is any kind of organisation that sets up a Continuous Intellectual Property Offering (CIPO) by funnelling part or all of its realised revenues to a Decentralised Autonomous Trust (DAT). Acxyn DAT is a smart-contract with the ability to automatically issue, buy back and cancel fully digital tokens called IPRTs (Intellectual Property Right Tokens) to meet market demand using predefined rules.

Acxyn Continuous Organisations present very beneficial properties for all stakeholders:

Founders get a simple and efficient mechanism to receive financing while strongly aligning their community with the financial success of their project, enhancing the organisation's capacity to create strong network effects without affecting the organisation's governance.
Employees advantageously trade alienable illiquid stock options for inalienable liquid IPRTs (which can vest as well), truly aligning their interests with those of the organisation.

Early investors receive their fair share of the upside in the case whereby the organisation is successful, without having to fear disproportionate dilution in later, bigger rounds.
The community of users, customers, suppliers and partners of the organisation get the ability to invest in the organisation in a friction-less and permission-less manner, thus aligning their interests with those of the organisation.

Regulators can better protect citizens from risky ICOs or IDOs due to the nature of IPRTs while also having the ability to tax revenues generated by Acxyn Continuous Organisations. The environment benefits from the decoupling of governance and financial interests proposed by the Acxyn Continuous Organization model, allowing founders and their organisations to be more focused on the long term.

## Acxyn Continuous Organisations

An Acxyn Continuous Organisation refers to any organisation that sets up a Continuous IP Offering (CIPO) to give to every stakeholder the ability to invest in the organisation at any single time.

**Continuous Intellectual Property Offering (CIPO)**
A Continuous Intellectual Property Offering (CIPO) is a novel way for organisations to receive financing without releasing any equity or any governance rights. A CIPO uses an organisation's realised revenues (i.e. revenues for which a payment has been made) as a collateral to back fully digital tokens (called IPRTs) that anyone can buy or sell to speculate on the organisation's future revenues.

To create a Continuous Intellectual Property Offering, an organisation would agree to build a collateral of value using a fixed percentage of its realised revenues during a predefined minimum period of time. This is done concretely by funnelling the said fixed percentage of revenues into a Acxyn Decentralised Autonomous Trust (ADAT). Acxyn DAT is a smart-contract that automatically issues and repurchases IPRTs to meet market demand from investors using a sigmoidal token bonding curve contract with sponsored burning.

Important note about the currency used to interact with an Acxyn DAT

In the following examples, we are using ETH (the currency of the Ethereum blockchain) as the currency to interact with the ADAT. ETH is the native currency for an Ethereum-based ADAT. It does not mean that end users (individuals and organisations) will necessarily have to manipulate ETH to interact with ADATs. First, ETH can be replaced by a stablecoin (like USDT or USDC) to remove the volatility associated with ETH.

**Understanding the token bonding curve model**

Many individuals have explored the bonding curve model since Simon De La Rouvière first came up with the idea in 2017.


A bonding curve contract is a specific type of smart-contract that issues its own tokens through Buy and Sell functions. To buy tokens, the buyer sends ETH to the Buy function which calculates the average price of the token in ETH and issues you the correct amount. The Sell function works in reverse: The contract will calculate the current average selling price and will send you the correct amount of ETH.

A token bonding curve model has interesting properties, including:

* Limitless supply. There is no limit to the number of tokens that can be minted.

* Deterministic price calculation. The buy and sell prices of tokens increase and decrease with the number of tokens minted.

* Guaranteed and immediate liquidity. The bonding curve contract is the counterparty of the transaction and always holds enough ETH in reserve to buy tokens back. So tokens can be bought or sold instantaneously at any time, the bonding curve acting as an **automated market maker (AMM).**

* Continuous price. The price of token n being inferior to the token n+1 and superior to the token n-1, calculating the number of tokens minted for a given amount of ETH (or the number of ETH sent back for a given amount of tokens) requires some integral calculus.

## The Acxyn Decentralised Autonomous Trust
In the case of Acxyn Continuous Organisations, we introduce the revenue-based bonding curve: a bonding curve that uses 2 different functions, one for the buy curve and another for the sell curve: B (for buy) and S (for sell)


The bonding curve contract of an Acyxn Decentralised Autonomous Trust issues IPRT (IPRTs). These IPRTs represent a claim on the ADAT's cash reserve. It is important to note that, unlike a stock, a IPRT does not represent a claim on the organisation's ownership, it only carries a financial right to the cash reserve managed by the DAT. And the ADAT's cash reserve is a function of the organisation's revenues. So, by buying IPSs, an investor gets a financial exposure on the organisation's future revenues.

The function B defines the price at which IPSs can be bought from the ADAT. B is a linear function and has a positive slope b such that B(x)=b*x where and b>0. The slope b can be chosen arbitrarily. The higher b is, the more value unit tokens will have, and vice-versa, as the lower b is, the less value unit tokens will have.

If you want your investors to have a lot of tokens, pick a very small value for b (like 1x10^(-9)). It has no financial impact, simply allowing more granularity for fractional rights.

The function S defines the price at which IPSs are bought back by the ADAT. S is a linear function as well and has a slope s such that S(x)=s*x where and s>0. However, in an Acxyn Continuous Organisation, the value of s changes over time. To explain how the value of s changes over time, it is important to understand how an ADAT receives and processes the cash it receives.

📈 Investments - buy()

The first (in "time", not in "proportion'') source of cash-flows for an ADAT_ are investors who want to invest in the Acxyn Continuous Organisation. They do that by calling the buy() function of the ADAT. Whenever an "external" investor (as opposed to the organisation itself) sends funds to the ADAT, a fraction of the funds sent is being held in the cash reserve by the ADAT and the rest of the funds are being transferred to the organisation's wallet. We'll call I (for invest) the percentage of the funds being held in the cash reserve. I is a constant.


**Value flows when an investment occurs**


**Impact on the Bonding Curve Contract of the ADAT when an investment occurs**

The investors buying IPRTs are doing so to invest money in the underlying organisation. Investors don't want their money to be held in reserve by the ADAT, they want their money to be put to good use by the organisation. Consequently, the value of s must be an order of magnitude lower than b, which means that I should ideally be low. I could also be 0 if the organisation's characteristics (revenues, growth...) can justify it.

Example: Let's say that an investor sends 10 ETH to the DAT, if I=10% then the DAT will transfer 9 ETH to the organisation's wallet and will keep 1 ETH in its cash reserve.

The rules described above do not apply if the investor is the beneficiary organisation, that is, if the organisation is technically investing in itself. In that case, I is always equal to 100%. It means that whenever an organisation is investing in its ADAT, 100% of the amount invested by the organisation to buy IPSs goes to the buy-back reserve.

**Benefits of Acxyn Protocol**
In the realm of intellectual property (IP), there is a growing interest in utilising token bonding curves and curation markets to fund, curate, and distribute ownership of IP assets. This paper explores the practical use of these mechanisms, collectively known as Token Curated Intellectual Property (TCIP). The goal of TCIP is to distribute risk, reward, and ownership of intellectual assets, while also enabling market participants to make early research and development stages liquid and tradable.

1. **IP Tokens as an AMM/Bonding Surface**:

Sigmoidal bonding curves, implemented as automated market makers (AMMs), offer several advantages for IP tokenization. These curves stabilise markets after a certain period or inflection point, aligning with the nature of intellectual ideas. As an idea proves its worth and its features are discovered, its market value becomes more measurable and finds a stable price. This allows for a linear line of production costs while simultaneously creating value that benefits IP owners and users. In this example the curve could look like this:


###### The consecutive stages of the game development process represent different stages of value growth and can be mapped along the curve. The Player Feedback stages 1–2 are commonly the most risky and resource intensive in the game development process. Correspondingly, the curve rewards participants here most.

In this example, market participants purchase more IPRTs along the curve as more positive information about the game is revealed through player feedback, or vice-versa. Ultimately, when the majority of information is discovered and the game update is approved to go to market, the market value stabilises, enabling commercialisation and pricing. Of course, this is an oversimplification of the economic processes involved in revealing more information about game development and its potential licensing of IPTs — but it’s a first attempt at more stable price discovery and attention measurement. We are working on this use case at [Acxyn.](https://acxyn.xyz)

Sigmoidal bonding curves are a clever smart contract that allows users to mint/burn tokens according to a previously defined pricing algorithm. The benefit of sigmoid bonding curves is that it allows developers to incentivize consumer behaviours with different pricing structures and allows tokens to create their own markets without having to rely on exchanges. Different bonding curve shapes will be adopted based on what type of investment the developer is looking for. For game studios and developers, the sigmoidal style bonding curve will be particularly useful if they want to reward early investors and are trying to make their project go viral. The sigmoid curve has three distinct phases: the learning phase, the growth phase, and the decline phase. As the project gathers more interest and more investment, the curve begins to flatten, finally only having a gradual increase until a new stage of development is reached and then it can begin again with a continuous funding model. This type of bonding curve is particularly good for projects that are geared toward a large audience, such as a platform that revolves around gaming in crypto like GameFi or a platform that creates and sells non-fungible tokens (NFTs).

Overall, the benefits of a sigmoidal style bonding curve for game studios and developers include the ability to incentivize consumer behaviours with different pricing structures, create their own markets without relying on exchanges, and reward early investors.

2. **Dynamic Reserve Ratios for Bonding Curves**:

Dynamic reserves are a feature of token bonding curves that allow for the adjustment of reserves to ensure sufficient liquidity and stability in the market as demand for tokens increases. This flexibility allows for the sustainable growth and evolution of the token ecosystem. Dynamic reserves are also critical in protecting the curve from front-running transactions and impermanent loss. Front-running is a type of market manipulation where a trader watches for submitted pending orders and uses this foreknowledge to send their own order with higher gas to cut ahead of the original order and profit from it. Bonding curves are susceptible to front-running attacks because the reserve is preprogrammed and not adjustable. This allows bots to access that liquidity before the liquidity providers can benefit from the fees on the swaps within the curve. By having a dynamic reserve ratio, the curve can be adjusted to not allow bots to have an advantage over the curve itself. This coupled with having an adjusting K value for the swaps makes impermanent loss non-applicable and can actually create impermanent gain.


###### What this is depicting is the relationship between the bonded assets inside the reserve and the emission and token price of the IPS tokens themselves. The Reserve is in blue and the IPS tokens are in red. The heat map of the colours is reflecting the amount of buys and sells.


###### This is a simulation of the dynamic reserve ratio adjusting in time according to the the price changes within the reserve and the buys and sells it is increasing as token price increases and balancing with sells.

In summary, dynamic reserves are a feature of token bonding curves that allow for the adjustment of reserves to ensure sufficient liquidity and stability in the market as demand for tokens increases. Sigmoidal bonding curves use a sigmoidal function to determine the price of tokens based on their supply. Various modifications to bonding curve designs have been proposed to mitigate front-running attacks, such as Batched Bonding Curves. The Reserve Ratio is a ratio between the market cap of the token and the value of the reserve balance, and a higher reserve ratio can be used to maintain the price stability of a token.

3. **Commercial Opportunities of Tokenizing IP**

Tokenizing IP assets opens up new commercial opportunities for creators, investors, and users. IPRT tokens can represent fractional ownership of valuable IP assets, allowing investors to diversify their portfolios and participate in the potential upside of successful IP ventures. Additionally, IPS tokens can be used as a means of accessing and licensing IP assets, creating new revenue streams for creators and facilitating collaboration and innovation.

Acxyn, the platform for the development of video games that tokenizes intellectual property, offers several commercial opportunities for its users. Acxyn will be offering ERC-4626 Weighed Vaults for IPRT tokens, which will allow further investment opportunities and yield along with fees accrued from providing liquidity. Uniswap V3 Vaults will also be offered to take advantage of the future dynamics of Acxyn Financial Market (AFM), where perpetual exotic options will be offered alongside regular swapping functions of tokens and assets.

CDPs or Collateralized Debt Positions are also a huge opportunity with Acxyn. Because of the capability of what Acxyn Continuous Organisations have to offer with bonding curves and dynamic reserves, the organizations can borrow against their own IP while allowing the curve tax and funding model to pay their loans back for them. Acxyn will also be offering CDPs to users through the creation of XYN, the liquidity index token of Acxyn, and SXYN, the protocol's very own and first of its kind steady token. SXYN is a stable coin that is created from a separate bonding curve that is minted from the asset XYN being collateral where the reserve ratio is always at 100%.

Fractional ownership of IP assets is another commercial opportunity that can be explored by tokenizing IP. Fractional ownership can be applied to intellectual property assets such as patents and trademarks, allowing investors to share in the potential revenue streams generated from licensing or enforcing these intellectual property rights.

Overall, tokenizing IP assets can create new revenue streams, facilitate collaboration and innovation, and provide investment opportunities for investors. Acxyn offers several commercial opportunities for its users, including ERC-4626 Weighed Vaults, Uniswap V3 Vaults, and CDPs through the creation of XYN and SXYN tokens. Fractional ownership of IP assets is another commercial opportunity that can be explored by tokenizing IP.

4. **IP Integration with Acxyn Tokenomics**:

The integration of IP tokenization with the Acxyn tokenomics ecosystem brings additional benefits and synergies. Acxyn's robust tokenomics framework provides a solid foundation for the governance, incentivization, and value capture mechanisms of IP tokenization. This integration ensures alignment between stakeholders and promotes the sustainable growth of the IP ecosystem within the broader Acxyn ecosystem.

5. **The Default Framework for Extensible and Composable IP Tokenization**:

The Default Framework, developed by Acxyn, serves as a powerful tool for implementing IP tokenization. This framework organises contracts around data models, allowing for greater flexibility and modularity. Modules and Policies, the building blocks of the framework, enable the management of shared state and the composition of business logic. The Default Framework simplifies protocol development, making it easier to adapt and upgrade the IP tokenization infrastructure as needed.

**Conclusion:**
Tokenizing IP with sigmoidal bonding curves, the creation of CIPOs, ADATs, and leveraging the Default Framework presents a transformative approach to funding, curating, and distributing ownership of intellectual property. This innovative model enables market participants to make early research and development stages liquid and tradable, while also providing new commercial opportunities for creators, investors, and users. The integration with Acxyn's tokenomics ecosystem further enhances the value proposition of IP tokenization. As the technology continues to mature, we can expect to see the widespread adoption of IP tokenization and its positive impact on the IP ecosystem.

Citations:
[1] https://tokeneconomy.co/token-bonding-curves-in-practice-3eb904720cb8

[2] https://guillaumelauzier.com/tokenization-intellectual-property/

[3] https://epicenter.tv/episodes/282/

[4] https://ripl.law.uic.edu/news-stories/tokenizing-ip-how-david-bowie-and-blockchain-set-the-stage-for-creating-a-digital-exchange-for-intellectual-property-assets/

[5] https://www.oecd.org/finance/The-Tokenisation-of-Assets-and-Potential-Implications-for-Financial-Markets.pdf

[6] https://www.nature.com/articles/s41598-022-05920-6

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[2]https://medium.com/charmfinance/introducing-alpha-vaults-an-lp-strategy-for-uniswap-v3-ebf500b67796

[3] https://crypto.ro/en/dictionary/collateralized-debt-position-cdp/

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[8] https://coinmarketcap.com/alexandria/glossary/collateralized-debt-position-cdp
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