# DAT Bonding Curve

The price of all DAT NFTs is determined via a convention called a [bonding curve](https://cointelegraph.com/explained/bonding-curves-in-defi-explained). \
In simple terms, a bonding curve is a a publicly disclosed pricing algorithm, a mathematical formula that sets the price of a token based on its supply and demand . On KiX each DAT NFT will use the same bonding curve so that all DAT NFT curves will be identical.\
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The bonding curve is housed within an on-chain smart contract and will determine the price at which the smart contract sells each token. This concept is a form of [Automatic Market Maker](https://www.coinbase.com/en-gb/learn/advanced-trading/what-is-an-automated-market-maker-amm), or AMM, as it is known in DeFi. \
The bonding curve issues each token at a progressively higher price than the previous one. This price increase occurs only when demand exceeds supply, ensuring a smooth, predictable, and continuous market. This mechanism guarantees that the pricing of each DAT NFT is fair and reflective of its value, providing traders with a reliable and transparent market.



<figure><img src="https://4102490893-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FTezpo0wf02vRYPfzdxUK%2Fuploads%2FAbhqVI1GyAEgjEVSj4u2%2FDAT%20Formula.png?alt=media&#x26;token=52e3b3a2-db42-47fe-b0c8-323a7c53e446" alt="" width="563"><figcaption><p>Bonding Curve Formula</p></figcaption></figure>

<figure><img src="https://4102490893-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FTezpo0wf02vRYPfzdxUK%2Fuploads%2Fw8U5NT2QqR73yIFGaUhI%2FGitBook%20DAT%20Curve.png?alt=media&#x26;token=ec897e4a-e570-49b6-8158-81142f9f18ac" alt=""><figcaption><p>Indicative DAT Bonding Curve - Price/Total DAT Issued</p></figcaption></figure>

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The bonding curve AMM is the methodology used to price and provide a liquidity pool within the smart contract. The pool consists of all the $KIX proceeds taken in by the smart contract when selling DAT NFTs minus the commissions traders pay. \
Each DAT NFT will have its own liquidity pool that resides within its own smart contract - this means there will be no co-mingling of liquidity across different DAT NFTs, which is a significant point!

These individualized pools will supply a bid price and surface on the platform as the 'Sell Price' against each DAT NFT. \
The pool for each DAT NFT reflects the liquidity held by the smart contract; this is done to help traders sell DAT NFT tokens in circulation for that singular athlete. This liquidity can be seen as a type of 'Total Value Locked' for each footballer's DAT NFT, which measures the total value of liquidity locked in a smart contract.\


The price trajectory of DAT NFTs will follow the same bonding curve on the way down as it did on the way up. The difference between the Sell price and the Buy price for each DAT is the bid/offer spread - this will range from 1-5% or 0.03 $KIX - whichever is the greater. \
The spread broadly accounts for the liquidity lost from the trading commissions paid to the rewards pool and not paid into the DAT Liquidity Pool. The Sell price is the price at which a trader can sell a DAT NFT, while the Buy price is the price at which a trader can buy a DAT NFT. The bonding curve and the current supply and demand of the DAT NFTs determine these prices.
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\* **PLEASE NOTE: Under regulation KiX is not offered or promoted to UK users or residents. \***
