> ## Documentation Index > Fetch the complete documentation index at: https://docs.vibetoken.cn/llms.txt > Use this file to discover all available pages before exploring further. # Choosing Your Pricing Constant k for Token Economics > The pricing constant k anchors your token price to your business scale. Learn how to set k from your MRR and avoid over- or under-pricing grants. The pricing constant `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 ``` k = max(MRR ÷ 1,000,000, 0.005) ``` Take your current monthly recurring revenue, divide by one million, and take the larger of that result or 0.005. The floor of 0.005 ensures that even pre-revenue businesses issue tokens with a meaningful, non-zero price. Token price at any supply level is then: ``` P = k × √S ``` So at launch with `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 $100K/month business should not issue tokens at the same price as a founder with $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 | MRR Range | k | Price at S=10,000 | | --------- | ------------- | ----------------- | | $0–$5,000 | 0.005 (floor) | \$0.50 | | \$10,000 | 0.01 | \$1.00 | | \$50,000 | 0.05 | \$5.00 | | \$100,000 | 0.10 | \$10.00 | 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 $60,000 in year-one revenue and `α = 0.20`, your expected year-one distributions are $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 is `tokens × 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 $0.032 each — a total value of roughly $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.