ALI Agent Bonding Curve Key Price Formula

Bonding curves are utilized within ALI Agents, to provide its embedded liquidity, a notable challenge in the blockchain industry. When any ALI Agent is created and minted as an NFT on the Base network, a bonding curve is launched with it, at the point of creation, with unique digital assets termed "Keys."

Each Agent's bonding curve allows for Keys to be bought and sold and a predetermined price, free of traditional market machinations

Bonding curves are mathematical DeFi mechanisms that determine the price of a token in a way that is directly tied to their supply. With ALI Agents, they are employed to facilitate the buying and selling of Keys via decentralized smart contracts, using the Artificial Liquid Intelligence (ALI) Token as a reserve token. This allows anyone who would like to buy or sell Keys of an Agent to trade for them with the ALI Token.

ALI Agents use a form of bonding curve that is "exponential," which means the price increases exponentially with the supply of tokens. Below is a chart tabling how much each Key of an Agent on the AI Protocol will be traded at.

In a bonding curve, the price of the Keys are directly proportional to the supply of the Keys

Furthermore, the AI Protocol allows ALI Agents to enhance their liquidity further by issuing ERC-20 tokens, known as ALI Agent Tokens. These tokens can be used to evolve the economy and community of an ALI Agent and its Key Holders, adding an additional layer of incentives and rewards. This includes opportunities for the expansion of fandom and follower enterprises, token-gated community events, and the organization of a creative economy, illustrating how ALI Agents can use a multitude of tokenized relationships within the Agent's community​​.