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Bonding Curves

Bonding Curves

TL;DR:

Bonding Curves create a built-in market for tokens. When someone buys a token, the price goes up; when they sell, the price goes down. The curve defines the relationship between token supply and price, enabling continuous, automated fundraising or liquidity for a project.


This mechanism allows:

  • Real-time token issuance tied to demand
  • Transparent, predictable pricing
  • Built-in liquidity (tokens can be redeemed at any time)
  • Speculative alignment between contributors and supporters


Bonding Curves are used in a variety of contexts:

  • Public goods funding: contributors receive tokens that can later be redeemed or traded
  • Governance: tokens represent voice or access
  • Reputation systems: bonding curve logic controls access or staking rights
  • Commons economies: shared ownership is distributed based on contribution and belief in the project


Bonding Curves often include a reserve pool (in ETH, DAI, etc.) and are configured with a pricing function (linear, exponential, sigmoidal). They can also be augmented (see Augmented Bonding Curves) to add features like delayed exits, fees, or sustainability tweaks.

Best For

  • Projects that want to align funding with belief or usage
  • Commons-based ecosystems
  • Continuous fundraising with built-in liquidity
  • Token-based governance or access systems

Good At

  1. Creating real-time market dynamics
  2. Enabling contributor upside and risk-sharing
  3. Building community ownership over time
  4. Supporting price discovery and belief-based participation

Dependencies / Requirements

  • Smart contract to define curve logic
  • Reserve asset and treasury management
  • Governance or configuration parameters (slope, cap, reserve ratio)
  • Clear token design and use case (governance, rewards, access, etc.)

Not Good At

  • Fixed-price or one-time grant models
  • Highly speculative or pump-prone environments
  • Situations requiring full predictability or capped supply
  • Projects without active community or demand

Who Should Use It?

  • Token-engineered DAOs or commons
  • Projects wanting to reward early supporters with future upside
  • Builders of regenerative public goods economies
  • Coordinators seeking dynamic capital flows tied to belief or use

Example Use Cases

  • A public goods project launches a bonding curve to sell access/governance tokens and fund development
  • A DAO uses a bonding curve to mint participation tokens, which can be redeemed if the contributor exits
  • A coordination game mints “belief tokens” via bonding curves—supporters fund and shape the future of the commons