What is Bonding Curve?

Category: Crypto

1Definition

A mathematical formula that determines a token's price based on its supply—more tokens mean higher prices.

2Context

Used by some DeFi protocols and meme coin platforms. Creates automatic price discovery.

3Example

On a bonding curve, the first buyer pays $0.01 per token; as more buy, the price automatically increases.

⚠Common Trap

Bonding curves aren't free money for early buyers—early sellers can crash the price for later investors.

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