AIMS Paper | Automatic Increase Market Systems

Abstract

This paper introduces Automatic Increase Market Systems (AIMS), a novel theoretical framework for cryptocurrency design that addresses the fundamental volatility issues plaguing traditional digital assets. AIMS transforms uncertain market-driven prices into deterministic, time-based value functions, providing predictable growth patterns while maintaining decentralization and transparency.

1. Introduction

The rapid growth of cryptocurrencies in recent years has established them as important assets in internet transactions. However, one of the main drawbacks of cryptocurrencies is their high volatility and value fluctuations. Cryptocurrency values can change quickly and dramatically, making them risky investments. The lack of regulation in cryptocurrencies may exacerbate their volatility, leading to speculative bubbles where many investors buy and sell based on short-term price movements rather than fundamental value.

Therefore, reducing the volatility risk introduced by exchanges, transforming uncertain prices into deterministic values, and promoting the benefits of decentralized finance are crucial for the future development of cryptocurrencies and Web 3.0.

2. AIMS Framework

To address these issues, this paper proposes a novel theory called Automatic Increase Market Systems (AIMS) for cryptocurrencies. AIMS can be designed as a system that automatically adjusts cryptocurrency values, helping to stabilize prices and appreciate over time in a deterministic manner.

We have built a cryptocurrency LOVE (https://lovecoin.app) based on AIMS to demonstrate how automatic increase market systems work in practice and how they adjust cryptocurrency supply according to market demand, ultimately making it a stable medium of exchange while ensuring AIMS is fair and transparent.

3. Mathematical Foundation

3.1 System Definition

Let $P$ be the set of all participants in blockchain network $N$, where each participant $i$ has a public key $\pi$ and a private key $\psi$. Let $T$ be the set of all transactions in the network. Let $C$ be the smart contract code deployed on $N$, which is a program that executes automatically when specific conditions are met. Let $\gamma$ be a stablecoin on $N$.

The cryptocurrency $c$ issued by $C$ is represented as $\Delta$. The value of $\Delta$ is a deterministic increasing function of time $t$, denoted as $f_C()$, where $t$ is a variable within a time span $(t \in (t_i, t'))$ as input to the function.

$$\Delta_{C,t} = f_C(t), \quad t \in (t_i, t')$$

where $t_i$ is the initial time point for automatically generating the price of $c$ relative to $\gamma$, and $t'$ is the final time point for using $f_C()$.

3.2 Theoretical Properties

Lemma 1 (Monotonic Growth):

Assume $t_x < t_y$, where $t_x, t_y \in [t_i, t']$, then $\Delta_{C,t_x} < \Delta_{C,t_y}$.

This lemma demonstrates the deterministic increasing property of $c$ under AIMS. Within the given function's time span, the value of $c$ on $N$ always increases over time.

Lemma 2 (Non-negative Constraint):

For participant $i \in P$ with $\gamma$ amount $\xi$ on $N$, the following formula always holds:

$$\xi \geq 0 \cdot \Delta_{C,t}$$

This lemma applies to non-negative values of $\xi$, and the generation price of $c$ at time $t$ is always positive.

Lemma 3 (Total Locked Value):

Assume participant $i \in P$ has $\gamma$ amount $\xi_t$ on $N$, the total locked value $\Omega > 0$ at time $t$ is:

$$\Omega = \sum_{t \in T} \frac{\xi_t \times f_C(t_m)}{\Delta_{C,t}}$$

The total locked value of $c$ shows the potential profitability of participant $i$. When $t > t'$, the growth slope of $\Omega$ is 0.

Lemma 4 (Net Profit Calculation):

The total net profit $\Lambda$ of $C$ for $P$ within $T$ (where $t < t_m > T$) is:

$$\Lambda = \sum_{t \in T} \frac{\xi_t \times (f_C(t_m) - \Delta_{C,t})}{\Delta_{C,t}}$$

Theorem 1 (Profitability Bound):

For participant $i \in P$ with $\gamma$ amount $\xi_t$ on $N$, we have $\Omega > \Lambda$.

Theorem 2 (Equilibrium Condition):

Let $\Xi$ be a function that encourages participants on $N$ to destroy $c$. We will always have a $\Xi$ to achieve a balance of 0 regarding the total locked value of cryptocurrency net profit:

$$\Xi = \Omega - \Lambda \neq \emptyset$$

This means it is possible to bring cryptocurrency to a stable state rather than inflated prices based on investment values in $\gamma$, providing a pure function of stable prices.

4. AIMS Benefits

Key Advantages Over Traditional Cryptocurrencies:

a) Reduced Volatility: AIMS uses automatic growth market systems to help reduce volatility in cryptocurrency markets by providing more stable and predictable investment options.
b) Increased Transparency: The decentralized exchange used by AIMS helps improve transparency and reduce the possibility of market manipulation.
c) Enhanced Security: The use of blockchain technology and decentralized trading helps enhance transaction security and ensure system integrity.

Overall, AIMS represents a novel approach and theory for cryptocurrency design and investment that could provide significant benefits to investors and help address some of the challenges and risks faced by traditional cryptocurrency markets.

5. Future Applications

In the future, decentralized trading and asset exchange between blockchains, including NFTs, could potentially be entirely based on AIMS design, introducing less risk and higher transparency compared to existing cryptocurrency technologies.

6. LOVE Implementation

The practical implementation of AIMS theory can be observed in the LOVE token deployed on Polygon mainnet. LOVE demonstrates the core AIMS principles through:

Time-driven price function: $P(t) = 0.001 \times 1.00000002197955315123^{(t - \text{launchTime})}$
Deterministic growth from 0.001 to 1.00 SAT/LOVE over approximately 10 years
Transparent smart contract implementation with no human intervention capabilities
Bitcoin SATs compatibility for familiar unit interaction

7. Conclusion

AIMS provides a theoretical foundation for creating more stable, predictable, and transparent cryptocurrency systems. By replacing market-driven volatility with mathematical certainty, AIMS opens new possibilities for digital asset design and decentralized finance applications.

The LOVE token serves as a practical demonstration of these principles, showing how academic theory can be successfully implemented in real-world blockchain applications to benefit users and advance the cryptocurrency ecosystem.

Citation

@article{aims2025,
  title={AIMS: Automatic Increase Market Systems for Cryptocurrency},
  author={LoveCoin.app Research Team},
  year={2025},
  url={https://lovecoin.app/aims.html}
}