# Overview

SC Bonding Curve is the token issuance component of the Something Cool platform. It implements a bonding curve mechanism.

## What is a Bonding Curve?

A bonding curve is a mathematical curve that defines the relationship between a token's price and its supply. As more tokens are purchased, the price increases according to a predefined formula. Similarly, as tokens are sold back, the price decreases.

## Bonding Curve Technical Details

SC Bonding Curve uses a constant product formula for its bonding curve, but with an important addition: **configurable virtual liquidity**.

### Constant Product Formula

The core formula that defines the relationship between token supply and price is:

```
k = (virtual_sol + real_sol) * (virtual_token + real_token)
```

Where:

* `virtual_sol` and `virtual_token` are the configured virtual liquidity amounts
* `real_sol` and `real_token` are the actual SOL and token in the bonding curve
* `k` is the constant product that is maintained throughout trades

### Token Creation Process

When creating a token on SC Bonding Curve, creators can specify:

* Token name, symbol, and metadata
* Token type (zero fee or community contribution)
* Fee parameters for community contribution tokens
* Initial distribution of fees (for burning, holders, and LP providers)

### Trading Mechanics

Users can buy and sell tokens on the bonding curve:

* **Buying**: Users send SOL and receive tokens at the current curve price
* **Selling**: Users send tokens and receive SOL at the current curve price

SC Bonding Curve automatically manages the price adjustments according to the bonding curve formula.

### Migration Preparation

SC Bonding Curve automatically prepares tokens for migration to the CoolDEX when:

* The token supply available in the curve falls below a predefined threshold (POOL\_MIGRATION\_RESERVES)
* This marks the token as "finalized" and ready for migration

This two-step approach (finalization followed by migration) ensures a smooth transition from the bonding curve to the DEX.


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