### NPM FUND **TL;DR: How the Bonding Curve Smart Contract Funds Open-Source Projects**

This system solves the funding problem for open-source projects by creating a **self-sustaining economic model** powered by token bonding curves. Here’s how it works:

1. **Continuous Funding Mechanism**:
- Every time someone buys or sells tokens, a percentage of the transaction (e.g., 21%) goes to the project maintainers.
- This creates a **reliable income stream** for developers, funded directly by the community.

2. **Early Supporters Fund Development**:
- Early adopters buy tokens at lower prices, providing initial capital for the project.
- As more people join, the token price increases, rewarding early supporters and funding the project further.

3. **Token Holders as Liquidity Providers**:
- By holding tokens, you automatically provide liquidity to the bonding curve.
- You earn a share of transaction fees (e.g., 3%) without needing to actively manage liquidity pools.

4. **No Middlemen or DEX Required**:
- The bonding curve itself acts as the market, ensuring liquidity and eliminating the need for a decentralized exchange (DEX).

5. **Anti-Whale and Pump-and-Dump Protection**:
- The bonding curve’s design discourages large sell-offs, ensuring price stability and protecting the project from manipulation.

6. **NFTs for Ownership and Support**:
- **Maintainer NFTs** prove official ownership of the project, ensuring only verified maintainers can earn fees.
- **Supporter NFTs** reward early backers with permanent proof of their contribution.

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### **How It Solves Open-Source Funding**

#### 1. **Sustainable Income for Maintainers**
- **Problem**: Open-source maintainers often rely on donations or sporadic sponsorships, which are unreliable.
- **Solution**: The bonding curve generates **continuous funding** through transaction fees. Every time someone buys or sells tokens, maintainers earn a percentage (e.g., 21%). This creates a predictable income stream tied to the project’s growth.

#### 2. **Community-Driven Funding**
- **Problem**: Traditional funding models (e.g., grants, donations) are centralized and limited in scope.
- **Solution**: The bonding curve allows **anyone to contribute** by buying tokens. Early supporters get tokens at lower prices, while later supporters pay more, creating a fair and scalable funding model.

#### 3. **Incentivizing Long-Term Support**
- **Problem**: Many open-source projects struggle to retain contributors and supporters over time.
- **Solution**: Token holders earn **passive income** through transaction fees, incentivizing them to hold tokens and support the project long-term. Maintainers can also use tools like the Drips Network to distribute earnings to contributors, fostering collaboration.

#### 4. **Transparent and Trustless**
- **Problem**: Traditional funding models often lack transparency, leading to mistrust.
- **Solution**: The bonding curve operates entirely on-chain, ensuring **transparency** and **fairness**. All transactions and fee distributions are publicly verifiable.

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### **Pseudo-Math: How It Works**

#### 1. **Buying Tokens (Minting)**:
- You send ETH to the contract.
- The contract calculates how many tokens you get based on the current supply.
- **Example**: If the supply is low, you get more tokens for your ETH. If the supply is high, you get fewer tokens.

#### 2. **Selling Tokens (Burning)**:
- You send tokens back to the contract.
- The contract calculates how much ETH you get based on the current supply.
- **Example**: If the supply is high, you get less ETH per token. If the supply is low, you get more ETH per token.

#### 3. **Fee Distribution**:
- For every transaction, a percentage is taken as a fee.
- **Example**: If someone buys tokens worth 10 ETH:
- 21% (2.1 ETH) goes to the maintainer.
- 3% (0.3 ETH) is distributed to token holders.
- 1% (0.1 ETH) goes to the platform.

#### 4. **Holder Rewards**:
- Token holders earn a share of the 3% fee pool based on their percentage of the total supply.
- **Example**: If you own 10% of the tokens, you earn 10% of the 0.3 ETH fee pool.

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### **Why This Works for Open-Source Projects**

1. **Early Capital Injection**:
- Early supporters provide the initial funding needed to kickstart development.
- As the project grows, the token price increases, rewarding early backers and attracting more supporters.

2. **Sustainable Growth**:
- Transaction fees ensure a continuous flow of funds, allowing maintainers to focus on development rather than fundraising.

3. **Community Ownership**:
- Token holders are incentivized to support the project long-term, creating a strong and engaged community.

4. **Transparency and Fairness**:
- The on-chain nature of the system ensures that all transactions and fee distributions are transparent and verifiable.

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### **Conclusion**
This bonding curve system provides a **decentralized, transparent, and sustainable funding model** for open-source projects. By aligning incentives for maintainers, supporters, and token holders, it solves the funding problem while fostering long-term growth and community engagement.