> ## Documentation Index
> Fetch the complete documentation index at: https://docs.2hour.fun/llms.txt
> Use this file to discover all available pages before exploring further.

# Price and graduation

> How a new coin's price is set by its bonding curve, what market cap means, and what happens when a coin graduates.

## The bonding curve

When a coin launches on 2hour.fun, there's no order book and nobody setting a price. Its price follows a simple rule called a **bonding curve**.

Every new coin starts with its whole supply held by a smart contract: the curve. When someone buys, they get tokens from the curve and the price goes up a little. When someone sells, tokens go back to the curve and the price comes down. The more that has been bought, the higher the price.

## Market cap

**Market cap (MC)** is the price of one token multiplied by the total supply. Every coin on 2hour.fun has a fixed supply, so market cap is an easy way to compare coins whose per-token prices look very different. Price alerts are set by market cap for the same reason.

> [!NOTE]
>
> **Example:** a coin with 1,000,000,000 tokens at \$0.00001 each has a market cap of \$10,000.

## Graduation

Each curve has a set size. When it has been bought out (watch the progress bar on each coin), the coin **graduates**. Its liquidity moves into a pool on a decentralised exchange in the same transaction:

* **Robinhood Chain:** a Uniswap pool.
* **Solana:** a Raydium pool.

From then on the price is set by that pool, and the coin can be traded from other apps as well as from 2hour.fun.

## Locked liquidity

At graduation the pool's liquidity is **locked for good**. Nobody, not the creator and not 2hour.fun, can withdraw it. That removes one common way a coin is "rugged".

> [!WARNING]
>
> Locked liquidity doesn't stop holders, including the creator, from selling their own tokens, so the price can still fall a long way.

## Why prices move so fast

* New coins usually have little money in them, so one big buy or sell moves the price a lot.
* A few large holders selling can bring the price down quickly. The [safety badges](https://docs.2hour.fun/safety-badges.md) show how concentrated a coin is.
* Past moves don't tell you what happens next.


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