For Customers Log in
Contact Us

Bonding Curve Meaning

A bonding curve is a mathematical pricing mechanism that defines a deterministic relationship between a token’s price and its circulating supply. Instead of relying on order books or traditional market makers, bonding curves algorithmically adjust price as tokens are bought or sold. At its core, a bonding curve follows a function such as:

Price = f(Supply) As demand increases and more tokens are minted, the price rises automatically. When tokens are sold or burned, the supply decreases and the price falls.

This creates a continuous, on-chain market with guaranteed liquidity. Bonding curves are commonly used in:

Different curve shapes (linear, exponential, sigmoid) produce different economic behaviors. For example, a steep curve rewards early participants with lower prices, while flatter curves reduce volatility for later buyers.

Because bonding curves are enforced by smart contracts, pricing is transparent and predictable. However, poor curve design can lead to extreme volatility or capital inefficiency, making careful modeling and security audits essential.

← Back to Glossary

Explore our services
Providing liquidity in the cryptocurrency market?
Authorize on our platform and do it smarter with FM Pulse.
pic

FM Marketplace

A reliable and high-performance crypto liquidity marketplace for institutions and businesses.

Learn more
pic

FM White Label

Launch your fully branded B2B crypto trading platform in under one week.

Learn more
pic

FM Liquidity Match

Crypto OTC-as-a-Service infrastructure for enhanced monetization and trade control.

Learn more

Scale your business, leave the hard work of your trading needs to us

Reduce your integration costs and operational risk across multiple access points with our platform

Get started