# Price discovery auctions

## Price Discovery Auctions

Doppler uses **on-chain price discovery auctions** to determine fair market prices for a new token before migrating liquidity into a live AMM. Auctions let real users compete for tokens based on supply and demand rather than fixed pricing, resulting in transparent and efficient price formation.

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### What Is a Price Discovery Auction

A price discovery auction is a market mechanism where participants place bids to acquire tokens. The final price emerges from buyer demand, supply constraints, and bidding behavior - revealing a market-clearing price that reflects true value in an environment with asymmetric information. 

In Doppler, this process allows token issuers to launch without having to attempt and price their own assets, letting the market determine the value while building a cohesive and liquid market.

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### Key Auction Types Supported

* **Static Auctions** — Simplest path: price increases on a simple supply curve.
* **Multicurve Auctions** — Multiple supply curves that shape price evolution.
* **Dynamic Auctions** — Price evolves based on configuration, market demand and time.

Each kind of price discovery auction is differentiated on how price update as tokens are sold, enabling flexible mechanisms tailored to a given project's goals.

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### How It Works (High-Level)

1. **Configure Auction Parameters**
   * Total tokens for sale
   * Curve type and slope
   * Fee routing and treasury rules
2. **Start Auction**
   * Users bid/buy along the curve
   * On-chain events record demand and fill
3. **Determine Clearing Price**
   * The auction clears when supply is exhausted or duration ends
   * The resulting price reflects aggregated demand
4. **Finalize & Migrate**
   * Auction proceeds are used to seed liquidity
   * Liquidity is migrated into a target AMM

This yields a **market-established price** and a live trading pool without manual pricing.

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### Why Auctions Matter

* 📈 **Fair pricing** — Market forces set the initial price.
* 🔄 **Transparent mechanics** — On-chain bidding reveals demand.
* 💧 **Efficient liquidity** — Auction proceeds form the foundation of the trading pool.
* 📊 **Demand-driven launch** — Prevents arbitrary initial pricing.

By embedding price discovery into token initialization, Doppler aligns incentives between issuers and early participants, resulting in the best possible outcomes.