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

# Trading on Bonding Curves

> How to buy and sell tokens on the XYZ Launchpad bonding curves

# Trading on Bonding Curves

Tokens on the launchpad are traded along a constant-product virtual curve. The price rises as more tokens are bought and falls as tokens are sold. The curve guarantees liquidity at every price point -- you can always buy or sell.

## Buying Tokens

To buy tokens on a bonding curve:

1. Navigate to the token's page on the launchpad
2. Enter the amount of **XYZ** you want to spend
3. Review the estimated tokens you'll receive and the price impact
4. Click **Buy** and confirm in your wallet

### Buy Mechanics

```
XYZ input → 0.5% fee deducted → curve calculates tokens out → tokens sent to you
```

The number of tokens you receive is calculated using the constant-product formula, accounting for the current virtual reserves.

### Slippage Protection

When buying, you set a `min_tokens_out` value. If the trade would result in fewer tokens (due to other trades executing first), the transaction reverts. The UI calculates this automatically based on your slippage tolerance.

## Selling Tokens

To sell tokens back to the curve:

1. Navigate to the token's page
2. Switch to the **Sell** tab
3. Enter the amount of **tokens** to sell
4. Review the estimated XYZ you'll receive
5. Click **Sell** and confirm in your wallet

### Sell Mechanics

```
Tokens returned to curve → curve calculates XYZ out → 2.5% fee deducted → XYZ sent to you
```

The sell fee goes entirely to LP reserves (liquidity).

### Slippage Protection

When selling, you set a `min_xyz_out` value. If you'd receive less XYZ than this minimum, the transaction reverts.

## Price Mechanics

The bonding curve uses a **constant-product virtual curve**:

```
K = virtual_xyz * virtual_tokens
price = K / (virtual_tokens_start - tokens_sold)^2
```

| Metric               | Description                                           |
| -------------------- | ----------------------------------------------------- |
| Starting price       | Dynamically computed from oracle XYZ/USD price        |
| Price direction      | Increases as more tokens are bought                   |
| Price discovery      | Deterministic -- price is a function of supply sold   |
| Guaranteed liquidity | You can always buy or sell at the current curve price |

### Reading the Chart

The token page shows a price chart tracking the token over time. Key indicators:

* **Current price** -- The price for the next marginal token
* **Tokens sold** -- How many of the 100M supply have been purchased
* **XYZ reserves** -- Total XYZ locked in the curve
* **Progress** -- Percentage toward the dynamic XYZ graduation threshold

## Simulating Trades

Before executing, you can preview the exact outcome using the simulate endpoints:

<CodeGroup>
  ```json SimulateBuy theme={null}
  {
    "simulate_buy": {
      "token_address": "<cw20_token_address>",
      "xyz_amount": "1000000"
    }
  }
  // Returns: tokens_out, fee_amount, new_price
  ```

  ```json SimulateSell theme={null}
  {
    "simulate_sell": {
      "token_address": "<cw20_token_address>",
      "token_amount": "1000000"
    }
  }
  // Returns: xyz_out, fee_amount, burned_amount, new_price
  ```
</CodeGroup>

The UI uses these queries to display estimated outcomes before you confirm.

## Fee Summary

| Action | Fee Rate | Details                                          |
| ------ | -------- | ------------------------------------------------ |
| Buy    | 0.5%     | Deducted from XYZ input before curve calculation |
| Sell   | 2.5%     | Goes to LP reserves (liquidity)                  |

<Warning>
  Once a token graduates to the AMM, you can no longer buy or sell on the bonding curve. All trading moves to the [AMM](/amm/swapping).
</Warning>

## Next Steps

<CardGroup cols={2}>
  <Card title="Graduation" icon="graduation-cap" href="/launchpad/graduation">
    Learn what happens when a token reaches the graduation threshold
  </Card>

  <Card title="AMM Swapping" icon="arrow-right-arrow-left" href="/amm/swapping">
    Trade on the AMM after graduation
  </Card>
</CardGroup>