A bonding curve is a mathematical function that defines the relationship between the supply of a token and its price. In AMMs, the bonding curve is the price fu
Bonding Curve
A bonding curve is a mathematical function that defines the relationship between the supply of a token and its price. In AMMs, the bonding curve is the price function derived from the pool’s invariant — for a constant product pool (x * y = k), the price of token X is y / x, moving along a hyperbola. Different invariants create different bonding curve shapes: constant sum (x + y = k) creates a flat curve suitable for stablecoin pairs with zero slippage within limits, while constant product creates a convex curve with unbounded price range. Curve Finance’s Stableswap combines both to create a curve that is flat near the peg and convex at the extremes. Bonding curves are not limited to exchange applications — they are also used in token launches (continuous token offerings) and decentralized insurance protocols.
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