Solana & memecoins
What is a bonding curve in crypto?
A bonding curve is a formula that sets a token's price from how much of it has been bought so far: each purchase moves the price up along the curve, each sale moves it back down. There is no order book and no counterparty - the contract itself is always willing to trade, which is how a brand-new token can have a price on its first second of existence.
Why launchpads use one
A new token has no market. A bonding curve manufactures one: the contract quotes a price to anybody, immediately, with no need for someone to seed a pool or post orders. It also makes the early distribution mechanical rather than negotiated - the first buyer pays the lowest price because they are first, not because they were allocated anything.
What it means for you as a buyer
- Your own buy moves your price. On a steep curve, a large order fills at a materially worse average than the quoted price.
- Position on the curve is most of the outcome. Buyers far down the curve are already in profit against everyone above them.
- Selling walks the price back down, so an exit by early buyers is mechanically painful for later ones.
Graduation
Once enough has been raised, most launchpads move the token off the curve and into a normal liquidity pool. That moment usually changes the trading character completely: deeper liquidity, real routing, and price now set by a market rather than a formula.
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