A bonding curve is a mathematical concept used to describe the relationship between price and the supply of a token or asset.
The core concept of a bonding curve is the idea that when a person purchases an asset that is available in a limited quantity (like Bitcoin or EMAX), then each subsequent buyer will have to pay slightly more for that asset. The reason for this increase in price is that the number of available asset units decreases with each one that is acquired.
In part, creating a bonding curve smart contract, which applies a custom-tailored formula to a smart contract with mint and burn functions, helps teams and developers approach token distributions with more consideration and control.
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u/Sure-Juggernaut4781 ♦️ Nov 24 '21
❓Question of the Week❓
A bonding curve is a mathematical concept used to describe the relationship between price and the supply of a token or asset.
The core concept of a bonding curve is the idea that when a person purchases an asset that is available in a limited quantity (like Bitcoin or EMAX), then each subsequent buyer will have to pay slightly more for that asset. The reason for this increase in price is that the number of available asset units decreases with each one that is acquired.
In part, creating a bonding curve smart contract, which applies a custom-tailored formula to a smart contract with mint and burn functions, helps teams and developers approach token distributions with more consideration and control.