Bonding Curve

A bonding curve is a formula written into a smart contract that sets a token's price purely as a function of how many units currently exist, so buying mints new supply at a higher point on the curve and selling burns supply at a lower one. Because the contract itself is always willing to trade, a project can launch without seeding a liquidity pool or finding a market maker. The shape of the curve decides everything about the economics: a steep curve rewards the earliest buyers heavily, and a curve with no reserve backing can leave later buyers with nothing to sell into. Bonding curves are common in token launchpads and in continuous-funding experiments.