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Additionally, PieDAO’s recently released PLAY index contains SOCKS as one of its 14 assets. A bonding curve shows the relationship between the supply and price of the asset. Bitcoin has a limited supply, so whenever any new user purchases the bitcoin, it needs to pay slightly more.
On May 9, 2019, at the Fluidity Summit in New York City, Uniswap announced Unisocks, a limited edition pair of socks utilizing a bonding curve as its pricing mechanism. To facilitate what is unisocks ease of trading, Uniswap created SOCKS, an ERC-20 token representing a pair of Unisocks. Users can freely trade SOCKS on Uniswap or redeem them to receive the physical pair of socks.
Because of the permissionless nature of DeFi, anyone can take it a step further and use SOCKS across other DeFi protocols. If you know about Decentralised Exchanges, you must have heard about the Pools, these pools are nothing but consist of liquidity of two tokens. Unisocks used a similar pool concept in which they built a Pool of 35 Ethereum Paired with the 500 SOCKS token. Any user who is interested to purchase SOCKS tokens from the eth can use that pool. It will be interesting to watch how projects experiment with bonding curves and how high SOCKS’ price can go. Those interested in getting exposure to SOCKS, but don’t necessarily want to buy one full SOCK, can purchase via DEXes with SOCKS liquidity pools.
- Users can freely trade SOCKS on Uniswap or redeem them to receive the physical pair of socks.
- Every time a token is bought, the following tokens’ price increases at a rate specified by the curve.
- Some of its known developers are Noah Zinsmeister, Uniswap’s engineering lead, and Callil Capuozzo, Uniswap’s designlLead.
Every time a SOCKS is purchased, its value increases, which is what is referred to as the “bonding curve” model. Instead of selling SOCKS at a fixed price and allowing the secondary market to determine their value, Uniswap chose to utilize https://cryptolisting.org/ a bonding curve for a dynamic pricing mechanism. In short, bonding curves allow for a token’s price to be a function of its supply. Every time a token is bought, the following tokens’ price increases at a rate specified by the curve.
There were about 500 SOCKS tokens created and locked into Uniswap’s liquidity pool with 35 ETH, which created this initial upwards price curve for SOCKS. Because SOCKS are ERC-20 tokens, they can be used like any other ERC-20 token on Ethereum. Uniswap created an initial liquidity pool of 500 SOCKS and 35 ETH to facilitate trading; however, anyone can make a pool with SOCKS. Users have already made alternative Uniswap pools, including DAI/SOCKS and USDC/SOCKS.
There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Some of its known developers are Noah Zinsmeister, Uniswap’s engineering lead, and Callil Capuozzo, Uniswap’s designlLead. Leander Capuozzo, Callil’s brother who worked with Uniswap on the design of Unishirt for their V0 birthday, also helped out on the sock design.
SOCKS reached an all time high (ATH) price of over $12,000 on Jan. 19, 2021. Furthermore, it is designed to increase in value every time a token is purchased. After at least 100 days, all remaining liquidity will be removed and the SOCKS tokens that are left will be burned. The Unisocks project was launched by the Uniswap team, and first brought to the limelight during the Fluidity Summit in New York City on May 9, 2019. In keeping with the zany and envelope-pushing nature of DeFi in 2020, the Unisocks project may seem completely absurd at first glance and a game between DeFi degens. However the end goal of shifting the borders of DeFi applications is very serious indeed, much like the MEME token that transformed the world of art and NFTs last year did.
Understanding Unisocks : How unisocks works?
Uniswap initially minted 500 SOCKS and deposited them into a liquidity pool with 35 ETH. Since its inception, 185 SOCKS have been burnt and taken out of circulation. Today, out of the 315 SOCKS still in circulation, only 14 remain in the liquidity pool. Uniswap initially intended to burn the unsold SOCKS after at least 100 days; however, they never went through with these plans. If you would like to know where to buy Unisocks at the current rate, the top cryptocurrency exchange for trading in Unisocks stock is currently Uniswap v3 (Ethereum).
Where Can You Buy Unisocks ($SOCKS)?
For example, imagine there is a pool of token A which has 100 tokens in a reserve, and token B which has 10 tokens in reserve. Imagine A seller A comes and buys the 10 Tokens A for 1 Token B, the supply at the Pool is now 90 Tokens A and 20 tokens B. So now the price is token A is 0.22 token B whereas earlier it was around 0.1 token B. So this is how the price exponentially increases when more and more tokens are purchased. First, the model allows for the initial minting and purchase of the token based on a price determined within the smart contract.
Redeemed Socks NFT
Imagine selling a pair of socks at a price of USD 90k, well, that is quite astonishing. Back in 2019 Uniswap, launched an exchange, where the users can trade SOCKS ERC20 tokens and redeem them for the real pair of socks. Instead of keeping the price fixed, they are using exciting mathematical formulas and components like the bonding curve. Holders of $SOCKS can sell them through the Unisocks platform anytime they want. Furthermore, it can also be used to redeem the pair of socks that the token represents. While Unisocks may have initially been released as an experimental project, they have inspired many others over the past few years.
Unlike other NFTs in the decentralized finance (DeFi) space, $SOCKS follows a “bonding curve” model governing its price, which enables the early adopters to earn more in profit than the late majorities. This is because when there are more tokens bought and brought to the supply, its value increases accordingly. Uniswap warns that Unisocks is one of the experimental projects on the protocol, which means that it’s very risky to invest in.
On top of price speculation, people purchase SOCKS believing they will be an important part of internet culture. When Uniswap released their governance token UNI, they even allocated 220,000 UNI to SOCKS holders and redeemers. Uniswap distributed 1000 UNI to each address that previously redeemed or held a SOCKS token at the snapshot date. This website is using a security service to protect itself from online attacks.
