> For the complete documentation index, see [llms.txt](https://spotlight-protocol.gitbook.io/spotlight-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://spotlight-protocol.gitbook.io/spotlight-protocol/spotlight.fun/bonding-curve.md).

# Bonding Curve

### Supply vs Price

The Spotlight Protocol utilizes a **bonding curve** mechanism based on an exponential function to determine the value of assets as they are purchased or sold. The function that drives this mechanism is:

$$
y = A \* e^{x\*B}
$$

Where:

* **y** is the resulting price in terms of $IP.
* **A** is a constant that sets the base value of the curve, influenced by the protocol's settings and initial conditions.
* **x** is the input variable, typically representing the amount of the token supply that are minted.
* **B** is the parameter that determines the steepness of the curve, influencing how the value changes as **x** increases.

### Key Points

1. **Initial $IP Reference**:
   * The initial reference price of the asset (referred to as **$IP**) is set at **$2**. This acts as the baseline price before market dynamics come into play.
2. **Dynamic Parameters Based on Market Conditions**:
   * The parameters **A** and **B** may change based on market conditions. Will have the announcement in advance.
   * This dynamic adjustment ensures that the bonding curve adapts to reflect the economic environment and maintain equilibrium within the protocol's ecosystem.

### **Token Supply**

* **Total Supply: 1B**
* **80%** of the token supply is allocated to the **bonding curve**.
* **20%** of the token supply will be added to **PiperX DEX** once the bonding curve reaches a certain threshold. 

### Bonding Curve Info

* Current $IP Price Reference

| IP Price reference         | $6          |
| -------------------------- | ----------- |
| Create token fee           | 0.1 $IP     |
| listing token fee          | 200 $IP     |
| Initial FDV                | $4200       |
| Graduation FDV             | $69,000     |
| Liquidity on Bonding Curve | \~ 3089 $IP |

* Tokens before 2025/3/3 05:30 UTC +0

The IP price reference will remain at **$2** for the tokens created before **March 3, 2025, 05:30 UTC**. Please exercise caution when purchasing tokens.

| IP Price reference         | $2          |
| -------------------------- | ----------- |
| Create token fee           | 0.1 $IP     |
| listing token fee          | 600 $IP     |
| Initial FDV                | $4200       |
| Graduation FDV             | $69,000     |
| Liquidity on Bonding Curve | \~ 9266 $IP |

The token before:  `0x85382819A9a9F696AD8BFB875B64800CeFC3e4DC`\
(We will have clear indication in the following update)

<figure><img src="/files/FNqD03xPuUzHxVVvIp0c" alt=""><figcaption></figcaption></figure>