What is a bonding curve?
5 min readIn short
A bonding curve sets the price by a formula: each buy raises the price a little and each sell lowers it. There is always someone to trade with, so you can buy or sell at any time.
Why it is used
New coins have no market yet. The curve acts as the market, so anyone can buy from the first second and sell back whenever they want.
What it means for you
Early buyers get a lower price. As more people buy, the price climbs until the coin graduates.
FAQ
Can the creator take the money in the curve?
No. The money stays in the contract until graduation, when it moves to a locked pool.