# ๐NFT Pricing

NFT Pricing using Bonding Curves

Last updated

NFT Pricing using Bonding Curves

Last updated

NFTs in Potion Protocol are priced according **Bonding Curves**.

A bonding curve is a mathematical function describing the relationship between the price and supply of an asset.

When tokens are purchased a bonding curve, each additional purchase drives the price up by an additional amount.

Likewise, selling tokens results in the price reducing along the curve.

XY=K Curve

Currently, Potion Protocol only supports a single type of price curve: the xy=k curve.

The xy=k curve prices assets directly according to their ratio in the pool.

A pool with 10 NFTs and 10 ETH would therefore price the NFTs at 1ETH each.

Buying an NFT from the pool would raise the price to 11 ETH / 9 NFTs = 1.22222 ETH per NFT, while selling would reduce the price to 9ETH / 11 NFTs = 0.818181 ETH.

The larger the amount of liquidity in the pool, the smaller the price change will result from each buy or sell.