📊Bonding Curve

The bonding curve is the mathematical formula that powers Khensu Fun's instant liquidity and dynamic pricing.

What Is a Bonding Curve?

A bonding curve is a mathematical function that defines the relationship between a token's supply and its price:

• As tokens are bought: Supply decreases → Price increases

• As tokens are sold: Supply increases → Price decreases

This creates automatic, algorithmic pricing without order books or market makers.

Prices on Khensu Fun are quoted in HTR.

Market cap is calculated as:

token price (in HTR) × total supply (1,000,000,000)

How It Works

Buy Flow

User sends HTR
       ↓
Contract calculates tokens receivable
       ↓
Tokens sent to user
       ↓
Price adjusts upward

Sell Flow

User sends tokens
       ↓
Contract calculates HTR receivable
       ↓
HTR sent to user
       ↓
Price adjusts downward

Key Properties

Instant Liquidity

Every token is immediately tradable after creation:

• No waiting for listings

• No need for market makers

• The curve is always available to trade against

Predictable Pricing

Price movements follow a known formula:

Factor	Effect on Price
Buy	Price increases
Sell	Price decreases
Large trade	Larger price impact
Small trade	Smaller price impact

No Counterparty

Trades execute against the curve itself:

• No order matching needed

• Always available to buy or sell

• Price determined algorithmically

Price Impact

What Is Price Impact?

The percentage change in price caused by your trade. Large trades relative to the curve's reserves create higher impact.

Example

Trade Size	Approximate Impact
Small	0.1-0.5%
Medium	1-3%
Large	5%+

Minimizing Impact

• Split large trades into smaller ones

• Trade when curve has more liquidity

• Accept impact if speed is priority

Fair Launch Economics

Starting State

Every new token:

• Begins with $0 market cap

• Has no pre-allocated tokens

• Trades from the same curve for everyone

Growth Path

As buys occur:

1. Price rises along the curve

2. Market cap increases

3. Early buyers benefit from price appreciation

4. Curve accumulates HTR reserves

Graduation Trigger

At 6,900,000 HTR market cap:

• Curve trading stops

• Accumulated reserves migrate to Dozer Finance

• Standard AMM trading begins

Technical Details

Curve Formula

The specific bonding curve formula determines:

• Rate of price increase per token

• Total supply cap

• Reserve ratio

[TODO: Add specific formula when available]

Slippage Protection

To protect traders from unfavorable execution:

• Users set maximum slippage tolerance

• Trades revert if price moves beyond tolerance

• Excess funds stored in internal balance for withdrawal

Comparison to Order Books

Aspect	Bonding Curve	Order Book
Liquidity	Always available	Depends on makers
Pricing	Algorithmic	Supply/demand matching
Execution	Instant	May partially fill
Complexity	Simple	More complex

Next Steps

• Understand the Fee Structure

• Learn about Graduation

• Review Architecture details