Introduction

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We proposed a new mechanism, that supply is increased at the moment the market demands into it, decreased vice versa. Commonly, we think that price decreases as supply increases in the market, but if we implement a “mint-on-buy” and “burn-on-sell” mechanism, which is discussed later in this paper, the price could still increase as a norm when supply is added, because the supply only increases when there is demand, it balances out the supply accordingly to the demand.

Price fluctuate sometimes in all market affected by liquidity, as token’s supply could not be balanced out in time [1]. Nearly all supply in markets we see nowadays are adjusted by humans, when it is needed, authorities would change the amount of supply by minting and burning supply, on a specific targeted time.

However, those changes that authorities made on the supply may not result as expected, due to supply and demand is changing in a dynamic way, and it is nearly impossible to change supply constantly from time to time without the application of an algorithm. But by combining the use of smart contract with an algorithm on the blockchain network, it is possible to create a decentralized market with supply constantly changing.