StakePoint
Solana DeFi Glossary
Definitions of key terms used in Solana DeFi, token locking, LP locking, and staking. Published by the StakePoint team.
Bonding Curve
An automated pricing mechanism where token price increases as supply sold increases.
Definition
A bonding curve is a mathematical pricing mechanism that automatically adjusts a token's price based on supply. As more tokens are purchased, the price increases along the curve. As tokens are sold, the price decreases.
Bonding curves remove the need for an external market maker or traditional liquidity pool at launch. The smart contract acts as the counterparty for all buys and sells, with the price determined algorithmically.
Pump.fun uses a bonding curve for new token launches. When a token reaches a market cap threshold on the bonding curve, the accumulated liquidity is migrated to a Raydium liquidity pool for open market trading — this is called graduation.
StakePoint & Bonding Curve
Tokens launched on Pump.fun's bonding curve can have their dev wallet or team allocations locked on StakePoint before graduation. After graduation and migration to Raydium, the LP tokens can also be locked.
Related Pages
Frequently Asked Questions
What is a bonding curve in crypto?
A bonding curve is an automated pricing mechanism where token price increases as more tokens are purchased and decreases as tokens are sold.
How does a bonding curve relate to Pump.fun?
Pump.fun uses a bonding curve for all new token launches. Tokens trade on the curve until they reach a market cap threshold, at which point they graduate to a Raydium liquidity pool.
Related Terms
Pump.fun
A Solana memecoin launchpad that enables token creation and bonding curve trading.
Liquidity Pool
A smart contract holding pairs of tokens that enables decentralised token trading.
Raydium
The largest decentralised exchange and AMM on Solana.
Token Mint
The unique on-chain address that identifies a specific token on Solana.
LP Locker
A smart contract that locks liquidity pool tokens on-chain until a set unlock date.