Bonding Curves

What a Bonding Curve Is

A bonding curve is a mathematical formula that prices tokens based on total supply. As more tokens are minted, the price increases according to the curve. As tokens are burned, supply decreases and price decreases. The smart contract handles minting (selling new tokens at the current price) and burning (buying back tokens, paying the current price) automatically. No orderbook required; price discovery is encoded in the math.

Why Bonding Curves Exist

Bonding curves solve a specific problem: launching a new token without needing initial liquidity or counterparties. Anyone can buy from the curve at the current price; the curve always provides exit liquidity. This makes them ideal for new project launches and continuous offerings. Pump.fun famously uses bonding curves to launch memecoins on Solana — each new memecoin starts at near-zero price on its own bonding curve and graduates to Raydium AMM after hitting a threshold market cap.

Common Curve Shapes

Different shapes serve different purposes. **Linear**: price grows linearly with supply (gentlest). **Quadratic**: price grows with supply squared (moderate aggression). **Exponential**: price grows exponentially (aggressive, used for FOMO designs). **Sigmoid**: gentle at edges, steep in middle (price-discovery focus). Each curve produces different distribution patterns and price dynamics. Project choice depends on intended use case.

• Price determined by mathematical formula based on supply
• Mint = buy at current price; burn = sell at current price
• Always provides exit liquidity (no counterparty needed)
• Curve shapes: linear, quadratic, exponential, sigmoid — different dynamics