Bonding curve
Bonding curve is a pricing rule in which a smart contract sells a token at a price set by a formula of how much supply has already been sold, so buyers trade against the contract rather than against a pool funded by the creator.[1] It is the default launch mechanism for Solana memecoins on pump.fun and similar launchpads.
History[edit]
Bancor's "smart tokens", launched in 2017, held reserves of other tokens and priced issuance against them; Bancor's token sale raised about $153 million in June 2017.[2] pump.fun applied a curve to memecoin creation so that creators need no starting liquidity.[1] Other Solana launchpads followed: LetsBonk passed pump.fun's share of launchpad deployments in July 2025,[3] and Meteora offers a permissionless Dynamic Bonding Curve whose launches graduate into its DAMM pools when a quote-token threshold is reached.[4]
How it works[edit]
pump.fun's program documentation describes a curve "based on Uniswap V2" that uses synthetic reserves.[1] Each coin has a total supply of 1 billion tokens; the curve starts with virtual reserves of 30 SOL and 1.073 billion tokens, of which 793.1 million are real tokens for sale.[1] A buy adds SOL to and removes tokens from both the virtual and real reserves, and a sell reverses this, so the price rises as tokens are bought; the documented fee is 1% on buys and sells.[1] Under the constant-product rule, these parameters imply about 85 SOL raised when the curve sells out.[1]
When real token reserves reach zero the curve is marked complete and stops trading; anyone can then trigger migration of the liquidity to PumpSwap, where the LP tokens are burned.[1] Traders call this "graduating". Few coins do: a study of Q4 2024 found fewer than 2% of Solana memecoin launches reached a major decentralised exchange.[5]
Criticism[edit]
Solidus Labs argued that pump.fun's curve favours creators, because price rises with every purchase and late buyers take the losses when early holders sell.[6] Wallets that buy in the first blocks through Sniping or Bundling capture the cheapest part of the curve, a frequent concern in the trenches.
Timeline[edit]
- 2017-06: Bancor's token sale raises about $153 million[2]
- 2025-07: LetsBonk passes pump.fun in share of Solana launchpad deployments[3]
See also[edit]
References[edit]
- ^ Pump program README, pump.fun (GitHub), n.d.
- ^ Bancor raises $153m from ICO in less than three hours, FinTech Global, 2017-06-14
- ^ Pump.fun Revenue Plummets as Meme Coin Traders Tap Other Launchpads, Decrypt, 2025-07-28
- ^ Dynamic Bonding Curve, Meteora, n.d.
- ^ The Memecoin Phenomenon: An In-Depth Study of Solana's Blockchain Trends, arXiv, 2025-12
- ^ The 2025 Rug Pull Report: Rug Pulls and Pump-and-Dumps on Solana, Solidus Labs, 2025-05