The Market Stability Index (MSI) measures the ratio of cumulative platform utility to current circulating supply:
MSI = Cumulative MMT Exchanged for Credits / MMT In Circulation
where:
• Cumulative MMT Exchanged for Credits = all MMT ever converted to MemoCredits since launch, accumulated in the swap wallet
• MMT In Circulation = Total Issued − Swap Wallet balance − Treasury (MMT) Wallet balance − Founder's Fund balance − Burned
• Total Issued = 1,000,000,000 − current Reserve Wallet balance
All three values are derived from on-chain state — continuously verifiable without off-chain data or time windows.
• MSI < 1 → More MMT is currently in circulation than has been used for platform utility — speculative conditions predominate
• MSI = 1 → A significant milestone: cumulative utility use equals current circulating supply
• MSI > 1 → Cumulative utility has exceeded current float — a mature, utility-driven ecosystem
MSI serves two roles. First, it is a public transparency metric — published continuously so market participants can assess the ecosystem's utility-to-speculation balance. Second, it governs automated Phase 3 wallet operations:
• MSI < 1, price stable or rising → Speculative conditions; Reserve Wallet sells MMT into the pool (up to 0.25% of pool per day), capturing USDC into the Treasury. Price direction is determined by comparing current price to the price 24 hours prior.
• MSI > 1 → Utility-driven conditions; Treasury uses accumulated USDC to buy MMT from the pool and permanently burn it (up to 0.25% of pool per day).
• MSI < 1, price falling or indeterminate → Both wallets hold — no action taken. When price direction cannot be clearly determined from the 24-hour lookback, the Reserve Wallet defaults to holding.
The two wallets never operate simultaneously. These operations follow published protocol rules executed via multisig, with all transactions on-chain and publicly verifiable.
MemoToken's market structure evolves through three distinct phases, each with its own liquidity management approach:
• Uses a linear bonding curve to set price continuously based on USDC pool depth
• Reserve Wallet injects MMT to hold price at the curve ceiling when needed
• Sells leave MMT in the pool — price may fall below the ceiling, recovering naturally through buy pressure
• Exit criteria includes USDC threshold and stability metrics
- Starting Price: $0.01
- Initial MMT Pool: 100,000 MMT
- Initial USDC Pool: 1,000 USDC
Rather than advancing through discrete price steps, Phase 1 uses a linear bonding curve that continuously sets price as a function of USDC pool depth:
price = (USDC_pool + 9,000) / 1,000,000
As USDC accumulates in the pool through purchases, the price rises smoothly. When MMT is sold back into the pool, USDC exits and the price decreases along the same curve. There are no discrete price steps, eliminating any incentive to front-run a price advance.
| USDC Pool | Price |
|---|---|
| 1,000 | $0.010 |
| 10,000 | $0.019 |
| 20,000 | $0.029 |
| 30,000 | $0.039 |
| 40,000 | $0.049 |
| 50,000 | $0.059 |
| 60,000 | $0.069 |
| 70,000 | $0.079 |
| 80,000 | $0.089 |
| 91,000 | $0.100 |
The Reserve Wallet manages MMT supply to maintain the bonding curve price:
When a user buys MMT (USDC enters the pool):
1. The curve price ceiling at the new USDC balance is calculated:
ceiling_price = (new_USDC_balance + 9,000) / 1,000,000
2. The MMT required to hold price at the ceiling is calculated:
required_MMT = new_USDC_balance / ceiling_price
3. If actual MMT in the pool is below required_MMT, the Reserve Wallet injects the difference. If the pool already holds sufficient MMT from prior sell activity, no injection is needed.
When a user sells MMT (USDC exits the pool):
The sold MMT remains in the pool. Price falls as USDC exits and MMT accumulates. No intervention occurs. Subsequent buy pressure naturally absorbs the excess MMT, gradually returning price toward the curve ceiling.
To prevent market manipulation and ensure orderly price progression, the following circuit breakers are implemented:
1. **Maximum Transaction Size**: Individual transactions cannot exceed 5% of the USDC balance in the liquidity pool at the time of the transaction.
Advancement to Phase 2 ($0.11 - $0.25) requires:
1. Sustained USDC pool balance above 91,000 USDC (price ≥ $0.10 on the bonding curve)
This comprehensive liquidity management policy ensures that Phase 1 provides a stable foundation for MemoToken's initial growth phase while maintaining market integrity and preventing manipulation.
• Uses a linear bonding curve to set price continuously based on USDC pool depth
• Treasury releases MMT to hold price at the curve ceiling when needed, earning USDC as revenue
• Sells leave MMT in the pool — price may fall below the ceiling, recovering naturally through buy pressure
• Exit criteria includes full Treasury MMT distribution, USDC balance, and stability metrics
Phase 2 transitions from the Reserve Wallet managing supply to the Treasury selling its MMT allocation, generating USDC revenue for operations and ecosystem development. Price continues to follow a bonding curve, eliminating front-running opportunities while preserving orderly price progression tied to liquidity depth.
• Starting Price: $0.11
• Initial USDC Pool: 91,000 USDC (carried from Phase 1)
• Treasury MMT Allocation: 1,000,000 MMT
• Treasury USDC Balance: 0 USDC
Phase 2 uses a linear bonding curve continuous with Phase 1:
price = (USDC_pool + 112,500) / 1,850,000
Price rises smoothly as USDC accumulates. Sells reduce the USDC pool and price decreases along the same curve with no Treasury intervention.
| USDC Pool | Price |
|---|---|
| 91,000 | $0.110 |
| 130,000 | $0.131 |
| 165,000 | $0.150 |
| 205,000 | $0.172 |
| 250,000 | $0.196 |
| 290,000 | $0.218 |
| 325,000 | $0.237 |
| 350,000 | $0.250 |
When a user buys MMT (USDC enters the pool):
1. The curve price ceiling at the new USDC balance is calculated:
ceiling_price = (new_USDC_balance + 112,500) / 1,850,000
2. The MMT required to hold price at the ceiling is calculated:
required_MMT = new_USDC_balance / ceiling_price
3. If actual MMT in the pool is below required_MMT, the Treasury releases the difference, earning USDC revenue. If the pool already holds sufficient MMT from prior sell activity, no Treasury sale occurs. Sales are naturally larger at higher price points, maximizing Treasury value capture.
When a user sells MMT (USDC exits the pool):
The sold MMT remains in the pool. No Treasury intervention occurs. Subsequent buy pressure absorbs the excess MMT, gradually returning price toward the curve ceiling.
1. Circuit Breakers:
• Maximum transaction size: 2% of the USDC balance in the liquidity pool at the time of the transaction
Advancement to Phase 3 requires:
1. Complete distribution of Treasury MMT allocation (1,000,000 MMT)
2. Treasury USDC balance exceeds 200,000 USDC
This approach ensures Phase 2 builds significant Treasury reserves while maintaining continuous, manipulation-resistant price discovery. The bonding curve naturally sells more MMT at higher prices, aligning Treasury revenue with market growth.
Once MemoToken completes Phase 2, it transitions to a fully free market. Price is determined entirely by supply and demand with no bonding curve. The Market Stability Index governs automated dual-wallet operations and is published continuously as a transparency metric for market participants.
1. Market-Driven Price Discovery
• Price determined entirely by supply and demand
• No bonding curve, no price targets, no protocol intervention
• Treasury MMT allocation fully distributed — no further managed sales
2. Market Stability Index (MSI)
• MSI is calculated and published continuously
• Informs market participants of the ratio of utility-driven activity to speculative activity
• Governs dual-wallet operations: Reserve Wallet sells into speculation (MSI < 1, price stable or rising, based on 24h price comparison, up to 0.25% of pool per day); Treasury buys and burns during utility-driven growth (MSI > 1, up to 0.25% of pool per day)
• Operations follow published protocol rules executed via multisig; all transactions are on-chain and publicly verifiable
3. Circuit Breaker
• Maximum transaction size: 1% of the USDC balance in the liquidity pool at the time of the transaction
Successful completion of Phase 2 requirements.
A single circuit breaker applies across all phases, with the limit tightening as the market matures:
Circuit Breaker — Maximum Transaction Size
• Phase 1: 5% of USDC pool balance
• Phase 2: 2% of USDC pool balance
• Phase 3: 1% of USDC pool balance
Measured at the time of the transaction. Transactions exceeding the limit are rejected; no trading halt or other action occurs. As the pool grows, the absolute dollar limit rises naturally while the percentage cap ensures no single actor can dominate price movement.
Beyond the circuit breaker, market integrity in Phase 3 is maintained by the combination of published MSI and dual-wallet operations. The MSI is published continuously, giving participants a clear signal of whether activity is utility-driven or speculative.
Sandwich Attack Mitigation: The 1% transaction cap limits the profit available to bots executing sandwich attacks. Users are advised to set appropriate slippage tolerance when transacting to provide additional protection.
This structure reflects MemoToken's trajectory: a tightly managed launch phase giving way to a free market as liquidity deepens and the participant base grows. Bonding curves govern Phases 1 and 2 to prevent manipulation during price discovery; Phase 3 lets the market govern itself.