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

# Bonding Curve Mechanism

The **Bonding Curve Mechanism** ensures **AI Agent Token** prices adjust dynamically based on market demand, incentivizing early adopters.

* **Token prices increase with higher purchases**, rewarding early community members with lower prices.
* A **portion of transaction funds** automatically goes into the **liquidity pool**, ensuring price stability.
* **Sell orders follow the Bonding Curve** to prevent sharp price drops from large sell-offs.