Rising Floor Algorithm (RFA)
The Rising Floor Algorithm (RFA) is an algorithm designed to control the price action of a token. It achieves this by distributing taxes on purchases and sales, which alters the ratio between the token's dynamic total supply and its backing asset, favoring the latter. The RFA provides a consistent increase in the token's value relative to the backing asset, regardless of the type of transaction being made. Each buy, sell, or transfer of tokens has unique effects on the token's value as it continues to grow.
Buys
When creating $REVIVE Tokens, the number of new tokens generated is dependent on the amount of assets provided as collateral. The presence of a tax on transactions slows the rate at which the total supply of tokens increases, resulting in a gradual rise in value. Unlike other tokens that provide 100% of the projected value in tokens, the $REVIVE Token will mint tokens for the buyer at a lower rate, allowing for price appreciation over time.
The process involves swapping the value of the backing asset for the equivalent value of the USDT used in the purchase, after which the backing asset is transferred to the contract pool. If the amounts of USDT and $REVIVE were equal prior to the transaction, the Rising Floor Algorithm (RFA) would favor the supporting asset, resulting in a rise in the token's value.
To maintain the same level of momentum as the total and asset supply increase, increased transaction volume is required. This momentum can be sustained within the ecosystem by utilizing the price movement of the token based on a linear equation. This means that the price of the token increases in a straight line as the volume of trades increases. This is in contrast to a logarithmic price action, where the price moves exponentially in response to trade volume.
Sells
When tokens are returned to the contract, they are removed and eliminated from the Total supply. Furthermore, instead of sellers receiving 100% of their estimated value upon redemption, they would receive:
The tax levied on the quantity of assets returned leads to a change in the ratio of the remaining tokens to the asset in the contract, favoring the latter even more and causing its value to appreciate. This is because the total supply of tokens is reduced while the amount of backing assets in the contract remains the same.
Selling a token results in its removal from circulation, which decreases the total supply of tokens. The amount of underlying assets that can be redeemed upon selling the token is subject to a tax, which causes the price of each token to increase beyond its actual redeemable value. As a result of this tax, the total supply of both the token and its backing assets decrease, which leads to more significant price changes with less transaction volume. The price of the token increases exponentially with each sell transaction.
Transfers
During a token transfer, a fee is charged as a percentage of the transferred amount. This results in a decrease in the total supply of the token, which causes its price to increase beyond its actual redeemable value.
Transferring the token causes a linear increase in its price, as the tokens are removed from circulation without affecting the backing supply.
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