1. To begin, real-world data and statistics are tokenized using the Fractional NFT technique, providing consumers with something to trade. These are known as “Smart Tokens.”

 

  1. A bonding curve is used to govern the tokens, which automatically establishes and modifies the price of each share token based on supply and demand.

 

  1. When a person buys a Smart Token, their money is added to the token’s reserve balance, and new Smart Tokens are given to the buyer. This means that the token’s reserve balance will rise, as will the token’s supply, and hence its price. When a user liquidates a Smart Token, their username is removed from the supply chain, the reserve tokens are returned to the seller, and the total token price falls. It’s all about supply and demand in the end.

 

  1. Stable coin comes in as the common reserve token that is meant to ensure that the price fluctuation of the reserve has no effect on the entire price of smart tokens.