> ## Documentation Index
> Fetch the complete documentation index at: https://docs.xd.fun/llms.txt
> Use this file to discover all available pages before exploring further.

# Bonding Curve

> How token pricing works on XD.fun

## Overview

New tokens launch on a bonding curve — a mathematical formula that determines price based on supply. As more tokens are bought, the price increases. As tokens are sold, the price decreases.

## The Formula

XD.fun uses a **constant product** formula:

```
x × y = k
```

Where:

* **x** = SOL in the pool
* **y** = Tokens in the pool
* **k** = Constant (never changes)

## Price Discovery

* **Buying** removes tokens from the pool → price goes up
* **Selling** adds tokens back to the pool → price goes down
* Price is always determined by the ratio of SOL to tokens

## Initial State

Every token launches with:

* **30 SOL** virtual liquidity
* **1 billion** token supply
* Starting price based on this ratio

## Why Bonding Curves?

* **Fair launch**: Everyone buys at the same curve
* **No presales**: First buyer gets lowest price
* **Instant liquidity**: Trade immediately after creation
* **Transparent pricing**: Price is always calculable

## Fees

Each trade incurs a 0.75% max fee:

* 0.45% protocol fee
* Up to 0.30% creator fee (max, depends on creator's fee modifier)

<Card title="Migration" icon="arrow-right" href="/how-it-works/migration">
  Learn what happens when a token graduates from the bonding curve
</Card>