Bonding Curve
DeFi
Formulaic pricing mechanism based on token supply.
A bonding curve is a rule that ties token supply to price. Buyers mint from the contract and push price up along the curve. Sellers burn to redeem and push price down. This creates built in liquidity without a traditional order book. Curves are powerful but not magic. Review the math, treasury backing, and exit rules before you join.
Frequently asked questions
How does a bonding curve set price?
It uses a formula that maps supply to price. When users buy, supply rises and price increases along the curve; when they sell, the reverse happens.Why use bonding curves instead of order books?
They provide always on liquidity for new tokens and predictable pricing without market makers. This helps bootstrap projects and communities.What are the risks?
Low liquidity at launch, price manipulation, and unclear rights for buyers. Read the contract and treasury rules before participating.