Crypto glossary
Bonding curve
A bonding curve is a pricing formula in a smart contract that sets a token's price by its supply, so each new purchase costs slightly more than the last.
With a bonding curve, the contract itself is the market maker. Buyers send funds and the contract mints new tokens at the price given by the curve; sellers return tokens, which are burned, and receive funds from the reserve. Because the price rises with supply, early buyers pay less than later ones, and liquidity is always available along the curve.
The idea has been used for continuous token sales and community currencies, and became widely known through memecoin launch platforms such as pump.fun on Solana. There, a new token trades on a bonding curve until it reaches a set market cap, after which its liquidity moves to a regular DEX pool.
A bonding curve does not give a token any underlying value: prices can fall just as mechanically when holders sell. Early insiders and bots often capture most of the gains, and most tokens launched this way lose almost all their value.
Example
On a hypothetical linear curve, the first token costs 0.001 SOL and each additional token raises the price by a tiny fixed step, so buyer number 10,000 pays far more per token than buyer number 1.
