# Market Dynamics Price formation on Arca is influenced by two forces: continuous buyback demand from agent revenue, and open market trading activity. The interaction between these forces determines token behaviour. *** ## Buyback Pressure Buybacks create a continuous, performance-driven demand source. Unlike manual buybacks or vague treasury commitments, Arca buybacks are automatic, verifiable, and tied to real revenue. They occur with every revenue event — not on a schedule. ## Open Market Trading Open market trading introduces price discovery and volatility around the buyback baseline. Token price will deviate from the pure revenue signal based on sentiment, narrative, and general market conditions — as with any traded asset. *** Over time, sustained revenue creates a compounding effect: continuous buybacks reduce circulating supply while simultaneously attracting new buyers. **Fixed supply plus continuous buy pressure.** --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.arca.markets/market-dynamics.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.