> For the complete documentation index, see [llms.txt](https://docs.forest.inc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.forest.inc/pricing-and-trading.md).

# Pricing & Trading

## Pricing & Trading

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FOREST uses a two-stage pricing model designed to give tokens a smooth launch, predictable liquidity progression and stable long-term trading. This page explains how pricing evolves from the moment a token is created to how it trades once liquidity is fully established.
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## 1. Curve Phase (Price Discovery)

Every token starts with a bonding curve.\
This phase sets the early price, determines the market’s initial demand, and grows the liquidity base.

### Why a curve?

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{% tab title="Purpose" %}

* Prevents instant sniper volatility
* Gives creators a controlled launch environment
* Enables organic price discovery
* Lets early participants influence the starting economy
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A predictable early market where supply, demand and progression are visible and fair.
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### Types of curves

A creator chooses one curve type during setup:

* **Linear** - steady, predictable progression
* **Exponential** - faster early acceleration
* **Logarithmic** - fast initial jump, slower expansion later

Each curve creates a different market personality.\
The shape is transparent, and buyers can see how price responds to activity.

### What happens during the curve phase

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During this phase, users interact directly with the curve itself.
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* Users buy directly against the curve
* Liquidity accumulates in $FOREST
* Price increases as demand increases
* The protocol tracks progress toward the next phase: graduation

## 2. Graduation (Automatic Transition)

Graduation is the turning point where a token moves from curve-based pricing to long-term liquidity trading.

### How graduation works

Each token has a liquidity threshold defined during creation.\
Once the token reaches that threshold through trading activity, it automatically transitions into the next stage.

### What graduation achieves

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{% tab title="Protocol Outcomes" %}

* Converts the token from a closed curve to an open liquidity pool
* Locks in the liquidity accumulated during the curve
* Establishes the foundation for stable, long-term trading
* Marks the token as ready for broader market activity
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When graduation triggers:

* The token’s status updates in the UI
* Pricing switches to the AMM model
* Trading becomes more flexible with standard swap interactions
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## 3. Liquidity Phase (AMM Trading)

After graduation, the token trades using a constant-product liquidity pool, the same model used by leading automated market makers.

### What this means

* Price is determined by the balance of the two assets in the pool
* Larger trades cause slippage in a predictable way
* Fees and buybacks continue to influence supply and behaviour
* Liquidity becomes the foundation for long-term stability

### Why this matters

Curve pricing is ideal for bootstrapping.\
AMM pricing is ideal for scaling.

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FOREST merges both seamlessly so tokens launch smoothly and then mature into robust, open markets.
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## 4. How Users Trade

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{% tab title="During the Curve Phase" %}

* Buyers enter by selecting how many tokens they want
* The system calculates the required $FOREST amount
* Price updates instantly based on the curve shape
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{% tab title="After Graduation" %}

* Trading becomes a standard swap
* Users can buy or sell any amount depending on pool depth
* Fees, buybacks and rewards continue to operate as configured
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FOREST’s trading flow is designed to feel simple on the surface while giving creators deep control over underlying mechanics.

## 5. Effects of Trading on Token Behaviour

### Liquidity growth

Each trade strengthens the pool, making the token more resilient.

### Buybacks

If enabled, a portion of volume automatically feeds buy pressure back into the token.

### Fee routing

Fees can direct value to:

* the creator
* the protocol
* the token’s own economy

### Market signals

Trading activity gives communities visible indicators:

* liquidity depth
* volume trends
* price movement
* supply impact

These signals shape how a token evolves after launch.

## Core Principles

FOREST’s pricing and trading structure is built around three simple principles:

* **Launch smoothly** – curves create controlled early markets
* **Scale predictably** – graduation converts early momentum into real liquidity
* **Trade sustainably** – AMM pools support long-term growth and user activity

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Together, these stages create a lifecycle where tokens can start small, grow naturally, and evolve into stable, tradable ecosystems.
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