> For the complete documentation index, see [llms.txt](https://guide.carrot-fi.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.carrot-fi.xyz/porject-info/launchpad/how-it-works.md).

# How it works?

Carrot Launchpad is designed to allow projects to efficiently raise funds and swiftly distribute tokens on decentralized exchanges (DEX). Below are the key features and how operates.

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Tokens are created with virtual liquidity (bonding curve), and it is the investors who contribute to the liquidity pool (LP) through their buys and sells.

### 1. Initial Market Cap

* The **Initial Market Cap** is determined by the t**arget raising amount** set by the **Minter** (the project creator).
* The Minter can freely set the target raising amount, which serves as a crucial indicator for the project's capital raising and initial valuation.
* The **Market Cap** is further influenced by the **Bonding Curve** (Linear or Flat) chosen by the Minter, which dictates how token prices will change during the presale process and impacts the overall market valuation of the project.

### 2. Automatic DEX Distribution Upon Reaching the Bonding Curve

* Once the Minter's target raising amount is achieved, the tokens are **immediately deployed** to a DEX. This ensures investors have instant access to liquidity, allowing the project to quickly enter the market.

### 3. DEX Distribution by Network 

* Based on the project's network, tokens are deployed to various DEXs:
  * On the **Neo X** network, tokens are deployed to **Carrot Swap**.
  * On the **Base** network, tokens are deployed to **Uniswap V3**.
  * On the **BSC** (Binance Smart Chain), tokens are deployed to **Pancake Swap**.
* This network-specific DEX deployment ensures optimized liquidity and trading stability.

### 4. LP Token Burn and DEX Lock

* After the tokens are deployed on the DEX, the generated **Liquidity Pool (LP) tokens are burned**.
* Once burned, these LP tokens are permanently locked in the DEX, ensuring the project's liquidity remains secured and permanently tied to the DEX. This reinforces trust and stability in the liquidity pool.