🏝️What is a bonding curve?
Bonding curve is a type of automated market maker (AMM) that uses algorithmic trading to calculate the token's value. When a token is bought, it is minted and added to the total supply, moving up along the curve and increasing the price for the next buyer. Conversely, when a token is sold, it is burned or destroyed, reducing the total supply, moving down along the curve, and decreasing the price for the next seller. The bonding curve's pre-established shape and token supply enable investors to buy tokens using collateral and sell them directly through the program whenever desired.
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