Bonding curve
A bonding curve is a formula that sets an asset's price from how many units are in circulation, so each purchase raises the price and each sale lowers it.
Bonding curves guarantee there's always a price to buy or sell at, without a counterparty on the other side, because the curve itself is the market maker.
They're used in crypto token launches and prediction markets, and they model supply and demand directly: more demand, higher price.
In Journey Shares
Every listing's public pool is priced by a bonding curve, so even a brand-new listing always has a quote. →
Related terms
- Automated market maker (AMM): An automated market maker is a pricing formula that always quotes a price to buy or sell, instead of matching buyers with sellers in an order book.
- Supply and demand: Supply and demand is the model that explains prices: when more people want something than is available, its price rises; when more is available than people want, its price falls.
- Slippage: Slippage is the difference between the price you expected and the price you actually got on a trade.
- Liquidity: Liquidity is how easily something can be bought or sold quickly without moving its price much.
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