Overview of Inverter Network
Established in 2023 in Switzerland, Inverter began as a research project to design a modular protocol infrastructure for programming token economies. In early 2024, Inverter introduced the Primary Issuance Markets (PIM) stack.

In short, PIMs enable projects to perpetually capture value from their token economies by facilitating dynamic token issuance with programmable distribution. In the initial version of PIM, bonding curves are utilized as the main dynamic issuance mechanism.

Key Features of Primary Issuance Markets (PIM):

Dynamic Token Issuance and Pricing: PIMs utilize algorithmic pricing for minting and redeeming tokens, which includes a reserve ratio and trading fees. This setup allows projects to dynamically adjust token supply based on market conditions and project needs.

Market Value Capture: PIM allows projects to profit from their tokens' trading volumes and volatility, capturing value from the token activity that previously only benefited external parties like third-party market makers and exchanges.

Sustained Treasury Growth and Stability: Proceeds from token issuance contribute to increasing project reserves, establishing a price floor, growing the treasury, and supporting long-term development without dumping on the community.

Arbitrage Opportunities: Protocol-owned arbitrage agents ensure price stability and generate additional revenue when secondary market prices diverge from PIM-set prices.

Primary Issuance Market Stack (PIM Stack)
Inverter’s Primary Issuance Market (PIM) stack is designed to enable projects to seamlessly configure and operate the full life cycle of token economies. PIM stack enables builders to customize token issuance, utilities, and circulation for custom use cases.

Key Features of Inverter’s PIM Stack:

Plug & Play DeFi Functionalities: Inverter offers reusable, upgradable, and interoperable DeFi integrations, allowing subnets to design token economies without needing contract development.

Algorithm Library: Custom algorithms, such as dynamic pricing, condition the issuance logic of tokens through issuance curves, optimizing the token economy.

Agent Library: Projects can activate verifiable arbitrage agents to market-make for their PIMs, optimizing issuance parameters based on real-time data, credit scoring, and additional services.

Our Value Proposition
By leveraging PIM, Inverter focuses on various dynamic token issuance models for subnets and introduces the following benefits to the Avalanche Teleporter Ecosystem:

Dynamic Issuance via Bonding Curves:

When a project without an existing token on the C-Chain sets up a Subnet for the first time, users cannot obtain gas tokens due to a lack of liquidity. As a result, the funds available on the C-Chain cannot be utilized effectively. This creates difficulties during the initial onboarding phase, hindering the smooth establishment of the new Subnet.

PIM allows users to send their AVAX from the C-Chain directly to a bonding curve on the Subnet via Teleporter. This mechanism dynamically issues the Subnet tokens in response to the amount of AVAX sent, effectively addressing liquidity issues.

PIMs leverage bonding curves to create a market for any token by offering algorithmic bids and asks at each level of token supply without needing any liquidity provider or bootstrapping. This ensures that the token is tradeable from the moment of origination, making it an ideal solution for launching tokens without fundraising.

By facilitating the direct transfer and real-time issuance of tokens, Inverter ensures that users have immediate access to the necessary gas tokens, thereby smoothing the onboarding process and the setup of a new Subnet.

Dynamic Issuance via Oracles:

While major L1 projects have performance-based issuance models, such as rewarding validators through successful block production, their static nature limits current issuance models. They need dynamic incentives to meet specific objectives. This inflexibility results in static token economies that fail to reflect real-time performance metrics, leading to suboptimal alignment within the economic actors in the ecosystem.

Our solution integrates oracle-signaled issuance for subnet tokens, linking the issuance logic to on-chain and off-chain verifiable data. We create performance-aligned token economies by dynamically adjusting issuance according to set KPIs. This ensures that incentives are closely tied to real-time performance metrics, fostering a more engaging ecosystem where stakeholders’ behaviors are tied to economic incentives.

Future Steps
Treasury Management for Subnets

There is a lack of low-risk treasury management options for AVAX tokens that are bridged to subnets. This limits subnets' ability to utilize their bridged AVAX tokens efficiently and securely.

Creating a Collateral Vault mechanism using the Teleporter allows subnets to efficiently use their reserves on the C-Chain. AVAX in this Collateral Vault can be used for liquid staking, providing low-risk options, and for other DeFi protocols, such as lending, if higher risk is desired.

Collateralized AVAX tokens can be converted into sAVAX or ggAVAX to earn rewards via GoGoPool or Benqi.

Collateralized AVAX tokens can be deposited into lending protocols like Benqi.