Dynamic Pricing Model

Overview

This documentation outlines the dynamic contribution pricing model implemented in the raffle system. This model dynamically calculates the pricing of contributions to reach a predefined reserved threshold value.

Initial Parameters

The model relies on the following crucial parameters:

• $nftPrice:$ The average price of the NFT collection.

• $totalFractionsOfNft:$ A random deciding variable to determine the Fractionalization value of the NFT within range - [10,20,30,40,50].

• $dynamicPriceRandom:$ A random factor influencing the price increment within the nftPrice range.

• $reservedThresholdValue:$ The target value to be achieved through contributions.

• $totalAvailableContributions:$ The total number of contributions available for purchase for a raffle

• $dynamicPriceRandomValue:$ Calculated as nftPrice / dynamicPriceRandom.

• $totalContributionsValue:$ The Total Value Obtained from for the sold contributions.

Initial Contribution Price

The initial price of each contribution for particular raffle is determined by:

$$initialPrice = nftPrice / totalAvailableContributions$$

Dynamic Price Update

Subsequent contribution prices are dynamically updated based on the previous price and the dynamicPriceRandomValue:

$$newPrice = previousPrice + dynamicPriceRandomValue$$

This process iterates until the totalContributionValue reaches the reservedThresholdValue.

Upon reaching the reservedThresholdValue, the remaining contributions are set to the last calculated price, ensuring the precise target is achieved.

Calculating Total Contribution Value

The total value of all contributions is obtained by summing the price of each contribution:

$$totalContributionValue = Σ (contributions)$$

Dynamic Pricing implemented

function calculateContributions() {
    // Given parameters
    const nftPrice = 0.5;
    let reservedThresholdValue = nftPrice * 2.5;
    const totalFractionsOfNFT = 40; // random number between 10 to 50 multiples of 10
    const dynamicPriceRandom = 5684; // random number between 1000 to 10000
    const totalAvailableContributions = Math.round(1.5 * totalFractionsOfNFT);
    const dynamicPriceRandomValue = nftPrice / dynamicPriceRandom;

    let initialContributionPrice = nftPrice / totalAvailableContributions;
    console.log(initialContributionPrice, '1');
    console.log(reservedThresholdValue, '2');
    console.log(totalAvailableContributions, '3');
    console.log(dynamicPriceRandomValue, '4');

    // Initialize an array to store contribution values
    let contributions = [initialContributionPrice];

    // Calculate subsequent contributions until reaching the reserved threshold value
    while (calculateTotalValue(contributions) <= reservedThresholdValue) {
        let lastContribution = contributions[contributions.length - 1];
        let nextContribution = lastContribution + dynamicPriceRandomValue;
        contributions.push(nextContribution);
    }

    // Once the threshold is reached, set the remaining contributions to the last calculated value
    let remainingContributions = totalAvailableContributions - contributions.length + 1;
    contributions = contributions.concat(Array.from({ length: remainingContributions }, () => contributions[contributions.length - 1]));

    return contributions;
}

// Function to calculate the total value of contributions
function calculateTotalValue(contributions) {
    return contributions.reduce((total, contribution) => total + contribution, 0);
}

// Call the function and get the contributions array
const contributionsArray = calculateContributions();

// Call the function to calculate the total value
const totalValue = calculateTotalValue(contributionsArray);

// Print the contributions and total value
console.log("Contributions:", contributionsArray);
console.log("Total Value:", totalValue);

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Output and Usage

The dynamic pricing model provides the following essential information to run a raffle:

• reservedThresholdValue: The target value to be reached.

• initialContributionPrice: The starting price of each contribution.

• totalAvailableContributions: The total number of available contributions.

• dynamicPriceRandomValue: The factor influencing the price increment.

• contributions: An array containing the price of each contribution.

• totalContributionsValue: The total value of all contributions.

The Dynamic Pricing Model provides a way, where the contribution price increases as more contributions are received, creating a sense of urgency and potentially increasing the total raffle pool.