# Pricing Algorithm The pricing algorithm utilized the [Bancor Formula.](https://billyrennekamp.medium.com/converting-between-bancor-and-bonding-curve-price-formulas-9c11309062f5) In this system, the Reserve Token refers to the reserve asset that users deposit into the bonding curve, while the[ Continuous Token](https://github.com/galtproject/continuous-token) is the GHST token that users receive in return for their deposited reserve asset. The Reserve Ratio was a fixed ratio between 0 and 100%, representing the value in the reserve pool divided by the value of the token supply multiplied by the price. A higher reserve ratio results in lower price sensitivity, meaning that each buy and sell transaction will have a relatively softer effect on price movement. Conversely, a lower reserve ratio results in higher price sensitivity, causing each buy and sell transaction to have a relatively stronger impact on the token price movement. This mechanism ensures that the token price adjusts appropriately with every transaction to maintain equilibrium. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library/case-studies/aavegotchi/pricing-algorithm.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.