Token prices

In the context of USDFI and other decentralized exchange platforms, token prices are determined by the supply and demand of the tokens in question. The smart contract that governs the platform utilizes an algorithm known as a constant product market maker, which maintains a constant ratio between the amount of two different tokens in a pool.

This constant, represented by the formula $x × y ≥ k$, is adjusted during each trade to maintain equilibrium in the market and determine the current price of the tokens.

The amount of each token in the pool is influenced by the actions of users buying and selling on the platform, resulting in fluctuations in token prices.