Bonding Curves
Understanding CoinBarrel's automated market-making and pricing mechanism
What is a Bonding Curve?
A bonding curve is a mathematical formula that determines the price of a token based on its supply. On CoinBarrel, every new token starts with a bonding curve that automatically adjusts the price as people buy and sell. The more tokens that are purchased, the higher the price becomes—creating a fair and transparent pricing mechanism with no pre-mines or insider allocations.
Unlike traditional token launches that require liquidity pools or market makers, bonding curves create instant liquidity from the moment a token is created. Anyone can buy or sell at any time, with prices determined algorithmically by the curve.
How It Works
As tokens are purchased from the bonding curve, the price increases following a mathematical formula. When 100% of the bonding curve supply is purchased, the token automatically migrates to CoinBarrel's native AMM with permanent, locked liquidity.
The Formula
CoinBarrel uses a quadratic bonding curve formula to determine token prices:
Price = Base Price × (Current Supply / Max Supply)²Base Price: The starting price when the token is created
Current Supply: The number of tokens already purchased from the curve
Max Supply: The total number of tokens available on the bonding curve
The quadratic (x²) nature of the curve means that price increases accelerate as more tokens are purchased. Early buyers get lower prices, while later buyers pay progressively more—creating natural incentives for early discovery and fair price discovery.
Example: How Price Changes Along the Curve
All tokens on CoinBarrel have 800,000,000 tokens available on the bonding curve. The curve type (30 SOL or 60 SOL) determines the base price and how quickly prices increase:
30 SOL Curve Example
60 SOL Curve Example
Benefits of Bonding Curves
Instant Liquidity
No need to wait for liquidity pools or market makers. Buy and sell immediately from the moment of launch.
Fair Launch
Everyone starts at the same point on the curve. No pre-sales, team allocations, or insider advantages.
Price Discovery
The market determines the token's value through real buying and selling activity, not artificial pumps.
Automatic Migration
When the curve is complete, liquidity automatically moves to CoinBarrel's native AMM with locked and burned LP tokens—no rug pulls possible.
Migration to CoinBarrel AMM
When 100% of the bonding curve tokens are purchased, CoinBarrel automatically migrates the token to CoinBarrel's native AMM (Automated Market Maker). Unlike competitors who rely on third-party DEXs like Raydium, CoinBarrel controls the entire lifecycle. Here's what happens:
Liquidity Pool Creation
All SOL collected from the bonding curve sales is paired with the remaining token supply to create a liquidity pool on CoinBarrel's native AMM.
LP Tokens Locked & Burned
The liquidity provider (LP) tokens are permanently locked and then burned, making it impossible for anyone (including CoinBarrel) to remove or steal liquidity. This guarantees rug-pull protection.
Permanent Trading on CoinBarrel AMM
The token is now permanently tradeable on CoinBarrel's native AMM with locked liquidity. Trading fees from the AMM are shared with token creators and active traders—a unique revenue-sharing model that sets CoinBarrel apart.
Buying and Selling on the Curve
Buying Tokens
- • You pay SOL and receive tokens at the current curve price
- • Your purchase increases the price for the next buyer
- • SOL is held in the bonding curve contract
- • Small trading fee shared with creators and active traders
Selling Tokens
- • You return tokens and receive SOL at the current curve price
- • Your sale decreases the price for the next seller
- • Tokens are returned to the curve supply
- • Small trading fee deducted, shared with creators/traders
What Sets CoinBarrel Apart
CoinBarrel's native AMM infrastructure provides unique advantages over competitors who rely on third-party exchanges:
🏗️ Built-In AMM
Unlike competitors who migrate to Raydium or other external DEXs, CoinBarrel has its own native automated market maker. This means seamless integration, better control, and enhanced security.
💰 Fee Revenue Sharing
Token creators and active traders earn a share of both bonding curve trading fees and AMM liquidity pool fees. This dual revenue stream rewards community participation.
🔒 Locked & Burned LPs
LP tokens are not just burned—they're first locked and then burned, providing double protection against rug pulls. No one can drain liquidity, ever.
⚡ No External Dependencies
By controlling the entire lifecycle from bonding curve to AMM, CoinBarrel eliminates external risks, migration delays, and third-party failures.
Important Considerations
- ⚠ Volatility: Token prices can be highly volatile, especially early in the bonding curve. Early buyers can sell and cause price drops.
- ⚠ Slippage: Large purchases or sales will move the price significantly. Use slippage settings to protect yourself.
- ⚠ DYOR: Always do your own research before buying any token. CoinBarrel does not endorse or verify token projects.
- ⚠ No Guarantees: Reaching 100% of the bonding curve (and migrating to CoinBarrel AMM) is not guaranteed. Many tokens may never migrate.
Technical Details
Standard Parameters
30 SOL Curve
Lower barrier to entry, ideal for community-driven projects
60 SOL Curve
Higher liquidity at migration, better for established projects
Frequently Asked Questions
What happens if the bonding curve never reaches 100%?
The token will continue to trade on the bonding curve indefinitely. Holders can buy and sell at any time, but the token won't migrate to CoinBarrel's native AMM until the full curve is purchased.
Can I lose money trading on the bonding curve?
Yes. If you buy tokens and the price drops (from other people selling), you can sell for less SOL than you paid. Cryptocurrency trading carries significant risk.
How much does it cost to complete a bonding curve?
CoinBarrel offers two bonding curve variants: 30 SOL or 60 SOL. The creator chooses which variant to use when launching their token. Once all tokens are purchased from the curve (reaching 100%), the token automatically migrates to CoinBarrel's native AMM with locked liquidity.
What rewards do token creators receive?
Token creators don't receive any token allocation—they must buy from the bonding curve like everyone else. However, when their token successfully completes the bonding curve and migrates to CoinBarrel's native AMM, creators receive a bonding reward: 1.5 SOL for 30 SOL curves or 3 SOL for 60 SOL curves. Additionally, creators earn ongoing revenue from both bonding curve and AMM trading fees!
How does CoinBarrel reward token holders and traders?
Unlike other launchpads that only reward creators, CoinBarrel shares trading fees with BOTH token creators AND token holders. This unique revenue-sharing model applies to:
- • Bonding Curve Fees: Trading fees from buys and sells on the virtual bonding curve
- • AMM Liquidity Pool Fees: Trading fees after migration to CoinBarrel's native AMM
Token holders can claim their earned fees on their profile page and track their earnings in real-time. This creates a sustainable incentive for active traders and long-term holders—a feature no other launchpad offers!