Understanding the Mechanics Behind PepuFactory
Deep dive into how bonding curves work, how liquidity is created and locked forever, and how the reward system benefits holders.
A bonding curve is a mathematical formula that determines the price of a token based on its supply. In PepuFactory, every token starts with a bonding curve phase where the price automatically increases as more tokens are purchased.
When you create a token, a portion of the total supply (60%, 70%, or 80% - your choice) is allocated to the bonding curve. This supply is gradually sold to buyers, and with each purchase, the price increases following a predetermined curve.
💡 Fair Launch: No presale, no team allocation, no insider advantage. Everyone buys at the same curve price - first come, first served.
The bonding curve continues until the target amount of PEPU is collected (default: 3,000,000 PEPU). Once this target is reached, the token automatically "graduates" to PepuSwap DEX with permanent liquidity.
When a token graduates to PepuSwap, liquidity is created using Uniswap V3's concentrated liquidity model. Instead of traditional LP tokens, Uniswap V3 represents liquidity positions as NFTs (Non-Fungible Tokens).
The LP NFT is sent directly to the token contract itself. This is a critical security feature. The token contract becomes the permanent owner of the liquidity position.
🔐 Permanently Locked: The token contract has NO function to transfer, withdraw, or interact with this NFT. It's trapped forever inside the contract with no way out.
⚠️ Irreversible: This design is intentional. Once liquidity is deployed, it's permanent. This protects all holders from liquidity removal scams.
Reward-based tokens operate on a fundamentally different dynamic than traditional tokens. Understanding this is key to seeing why they are designed for long-term sustainability.
In a reward token, every buy generates rewards for all existing holders. This means that the token doesn't just depend on price going up — it thrives on trading volume. High volume equals high reward generation, regardless of whether the price is rising, falling, or moving sideways. As long as people are buying, holders are earning.
In traditional tokens, a price dip is purely negative — holders lose value and panic sell. In reward tokens, dips create a completely different scenario:
The real power of reward tokens unfolds over time. Rewards earned from early volume increase your token balance, which in turn increases your share of future rewards. This compounding effect means that long-term holders who stay through dips and volatility end up with significantly more tokens than their original purchase — and when price appreciation kicks in, they benefit from a much larger position.
💡 Think of it this way: In a reward token, dips are not disasters — they're sales events where existing holders get paid. Every buyer, whether buying at the top or the bottom, generates value for the entire community. The key metric isn't just price — it's volume.
For Featured Tokens on PepuFactory, this effect is amplified. Holders earn both regular token rewards AND FACTORY token rewards from the batch sell system. During high-volume periods — including dips — both reward streams accelerate simultaneously, giving holders even more reason to stay and accumulate rather than panic sell.
One of PepuFactory's unique features is the built-in reward system. Token creators can allocate a percentage of buy taxes to be distributed to all token holders proportionally. Additionally, Featured Tokens can earn FACTORY token rewards through the FACTORY Tax system.
When someone buys a graduated token on PepuSwap, a buy tax is applied. The base tax (max 15%) can be split between three destinations, while the optional FACTORY Tax (0-5%) adds a fourth reward layer:
Tokens with FACTORY Tax collect the taxed tokens in an internal pot. When the pot reaches a configurable threshold, anyone can trigger a Batch Sell — converting the accumulated tokens into FACTORY rewards for all eligible holders.
🏭 How Batch Sell Works:
Rewards accumulate automatically as buys happen. To earn them, stake your tokens in the Reward Farm page. Anyone can harvest the accumulated buy tax rewards — they get split proportionally among all stakers. There's no minimum amount and no time restrictions. Locked Staking How To Stake
⚠️ Staking Required: To earn buy tax rewards, you must stake your tokens in the Reward Farm. Unstaked tokens do not accumulate rewards. Stake and unstake freely at any time — no lock-up periods.
Your share of rewards is calculated based on your percentage of the total supply (excluding excluded addresses like the liquidity pool and contract itself). If you hold 1% of the circulating supply, you receive 1% of all reward distributions.
PepuFactory allows token creators to set a maximum token amount per wallet, preventing whales from accumulating too large a share of the supply.
🛡️ Anti-Whale Protection: When enabled, no single wallet can hold more than the configured maximum amount of tokens. This ensures a fairer distribution and protects smaller holders from being dominated by whales.
The Max Wallet limit is set at token creation and enforced at the smart contract level — it cannot be bypassed. Excluded addresses such as the liquidity pool and the token contract itself are not affected by this limit.
To protect regular users from bot snipers at graduation, PepuFactory implements an anti-sniper mechanism during the first blocks after a token graduates to DEX.
🤖 99% Tax on Snipers: For the first 2 blocks after graduation, any buy transaction is hit with a 99% tax. This makes sniping unprofitable and protects fair buyers.
After the protection period ends, normal buy taxes apply as configured by the token creator. Note that during the bonding curve phase, no taxes are applied - taxes only activate after graduation to DEX.
Now that you understand the mechanics, launch your own token with fair tokenomics and permanent liquidity.