> For the complete documentation index, see [llms.txt](https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library/case-studies/aavegotchi/pricing-algorithm.md). # 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 This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://bonding-curve-research-group.gitbook.io/bonding-curve-research-group-library/case-studies/aavegotchi/pricing-algorithm.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.