So we know that when you buy a print, 8% of that money goes to the original LP owner.
Another 2% goes to the EulerBeats core team. That leaves us 90%...
Enter the “burn fund”. The burn fund is essentially a digital vault where 90% of the revenue off print sales sits. Print owners have the option to burn their print at any time. Burning a print — in the case of EulerBeats — is a lot like selling the print back to the project itself. If you burn your print, you receive 90% of the current print price of that LP.
Is your head spinning yet? Don’t worry, mine was too.
Here we get to the crux of why EulerBeats has built in all these complex contraptions...
By incorporating a bonding curve and burn fund, EulerBeats baked in the conditions to incentivize early supporters of the project.
This is best explained with an example:
Say it’s the first day this project launched. Not a lot of people know about it yet, and I come along and think it’s pretty cool. I notice that all 27 original LPs have been minted, but no prints have been purchased yet. So I scoot on over to LP 01, play it back and really dig the song.
I purchase print #1 for 1 ETH.
Because of the 90% burn fund, I know that if no one else ever buys a print, the worst case scenario is I burn my print and get back 0.9ETH. There is no way my investment is going to zero.
But! If the project does start to take off, and people start buying prints of LP 01, the print price is going to grow exponentially. Suddenly a few weeks go by, and let’s say the price to print LP 01 has gone up to 10ETH. I can burn my print and receive 9ETH for it, a profit of 8ETH!
Herein lies some pretty sweet ideas for creators of all kinds. By incorporating bonding curve pricing and a burn reserve fund, you can entice people to get in on the ground level of your newly launched projects.
For fans, this offers some amazing avenues to gain off of your taste. If you have a love and ability for finding talent early on, these pricing models create the perfect ecosystem for you to make those sorts of bets on people and projects. You get to support the artists you love, and take on a very limited risk while exposing yourself to potentially exponential gain.