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Understanding the Price Discovery Curve

The Price Discovery Curve is a chart displayed on every auction detail page. It visualizes real-time demand across price levels, showing how the Continuous Clearing Auction discovers the fair market price for a token launch.

What Is the Price Discovery Curve?​

When participants place bids in a CCA, each bid specifies a max price (the most the bidder is willing to pay per token) and a budget (the total USDC committed). The Price Discovery Curve aggregates all of these bids into a single demand curve that reveals where supply meets demand.

The chart answers a fundamental question: at each price level, how much total USDC demand exists?

How to Read the Chart​

Axes​

  • X-axis (Price in USDC) -- Shows price levels from low (left) to high (right). Each point on this axis represents a price per token that one or more bidders are willing to pay.
  • Y-axis (Total Demand in USDC) -- Shows the cumulative dollar amount of demand at each price level and above. This is the sum of all bid budgets from bidders whose max price is at or above the given price.

The Demand Curve (Red Line)​

The red line traces total cumulative demand at each price point. It slopes downward from left to right because:

  • At lower prices, more bidders qualify (their max price is above the threshold), so total demand is higher.
  • At higher prices, fewer bidders are willing to participate, so total demand drops.

The shaded red area underneath the line represents the total value of all bids at or above each price. A steeper drop-off indicates that demand is concentrated in a narrow price range, while a gradual slope suggests demand is spread across many price levels.

The Clearing Price (Green Dashed Line)​

The green vertical dashed line marks the clearing price -- the single price at which the auction settles for the current block. This is the key output of the CCA mechanism:

  • All bids with a max price at or above the clearing price are filled at the clearing price (not at their individual max price).
  • All bids with a max price below the clearing price receive nothing and can withdraw their funds.
  • The clearing price is the highest price at which all available tokens for the current block can be sold.

A green dot on the demand curve marks exactly where the clearing price intersects with cumulative demand, showing the total USDC committed at the clearing level.

The Estimated Clearing Price​

Below the chart, the current estimated clearing price is displayed in USDC. This value updates as new bids are placed or withdrawn, reflecting the latest state of demand.

Interactive Tooltip​

Hover over the chart to see exact values at any point along the curve. A crosshair appears at your cursor position, and a tooltip displays:

  • Price -- The USDC price at that point on the curve.
  • Total Demand -- The cumulative USDC demand at that price level (the sum of all bid budgets from bidders whose max price is at or above this price).

The data points along the curve correspond to actual bid price levels (ticks) in the auction. Each dot represents a price at which one or more bids exist.

Why the Curve Slopes Downward​

The downward slope is a natural property of cumulative demand. Consider three bidders:

BidderMax PriceBudget
Alice$0.25$8,000
Bob$0.20$5,000
Carol$0.15$2,000

At a price of $0.15, all three bidders qualify (their max prices are all >= $0.15), so total demand is $15,000.

At a price of $0.20, only Alice and Bob qualify, so total demand drops to $13,000.

At a price of $0.25, only Alice qualifies, so total demand is $8,000.

The chart plots these cumulative values, producing the characteristic downward slope.

Why This Matters​

The CCA mechanism ensures fair price discovery through several properties visible in the curve:

  1. Single clearing price -- Everyone whose bid is filled pays the same price. The green dashed line shows this uniform price. There is no information asymmetry where early or fast participants get a better deal.

  2. No front-running advantage -- Bids above the clearing price do not overpay. If you bid $0.25 but the clearing price settles at $0.15, you pay $0.15. Setting a higher max price increases your chance of being filled without costing more.

  3. Transparent demand -- The curve shows real-time aggregate demand, helping you make informed bidding decisions. You can see whether the auction is heavily contested (steep curve, high demand) or lightly bid (flat curve, low demand).

  4. Supply-demand equilibrium -- The clearing price is where the token supply released for the current block meets cumulative demand. The curve lets you visually identify this equilibrium point.

Reading the Chart for Bidding Strategy​

The Price Discovery Curve can inform your bidding decisions:

  • High demand relative to supply -- If the curve shows large cumulative demand and the clearing price is high, the auction is competitive. You may need a higher max price to ensure your bid is filled.
  • Concentrated demand at one price -- If the curve drops sharply at a single price level, many bidders are clustered there. Bids at that exact level may only be partially filled (pro-rata).
  • Sparse demand -- If the curve is flat with low total demand, the clearing price is likely near the floor price. Even modest bids are likely to be filled.
tip

The clearing price can change as new bids arrive or existing bids are withdrawn. Check the curve periodically during an active auction to understand how demand is evolving.

Empty State​

When no bids have been placed yet, the chart displays a placeholder message: "No bids yet -- curve will appear when bids are placed." The curve only renders once at least one bid exists in the auction.