k is the single number that ties token price to the scale of your business. Every price on the bonding curve — at launch, after a thousand grants, after a hundred revenue events — flows from k. Choose it to reflect what your business actually is today, not what you hope it will become.
The Formula
S = 1,000, your price is P = k × √1,000 = k × 31.62.
Why k Matters
k anchors token value to business scale. A founder running a 1K/month — the distributions those tokens eventually receive are wildly different. k makes this calibration automatic.
If k is too high relative to your actual business, early grants look expensive and impressive on paper — but when distributions arrive, they’re smaller than token holders expected. You’ve overpromised.
If k is too low, grants feel cheap. A contributor receiving 500 tokens worth $0.02 each might not feel like their work was valued, even if those tokens represent a real stake in future revenue.
Getting k right means choosing a price that reflects the genuine scale of what token holders are buying into.
k Values by MRR Tier
Price at
S = 10,000 is calculated as k × √10,000 = k × 100. Use these as reference points when evaluating how much a typical grant will be worth once your supply grows past the launch floor.
The 50% Rule of Thumb
Initial grants should total less than 50% of expected year-one distributions. Here’s why this matters: Distributions are the mechanism that gives token value. If you grant out tokens worth more than the business can realistically distribute, token holders will eventually feel the gap between expectation and reality. The 50% threshold gives you a buffer — it means that even if revenue comes in below your projections, holders are still likely to receive meaningful payouts over time. For example, if you expect 12,000. Under the 50% rule, initial grants should represent no more than $6,000 in expected distribution value.What Happens If k Is Wrong
k too high: Early contributors receive grants that look valuable at the time of issue. But token price is set by the bonding curve, and exit value istokens × P. If the business doesn’t grow into the price implied by a high k, token holders who try to exit will find the queue slow to clear. Distributions will be smaller than the token price suggested. Trust erodes.
k too low:
Grants feel trivial. A 500-token grant at k = 0.001 and S = 1,000 prices those tokens at about 16. Even if distributions are real and meaningful, the psychological signal to contributors is weak. You may struggle to attract or retain the contributors you actually want.
Pre-Revenue Founders
If you haven’t launched yet, use the floor:k = 0.005. This is not a placeholder — it’s the designed default for exactly your situation. It gives tokens a real price without overstating the scale of a business that hasn’t started generating revenue.
When you do launch (or shortly before), recalculate k based on your actual MRR at that moment. Once you initialize your token system, k is fixed permanently.
k is set at launch and is permanent. It cannot be updated as your business grows. Choose it based on your current MRR or your most honest near-term projection — not your three-year target.