Bonding curve - A bonding curve is a mathematical formula used in token economics that governs the relationship between the price of a token and its available supply. The bonding curve defines a price function that automatically adjusts the price of the token based on its supply, increasing the price as the supply grows and decreasing it as the supply decreases. This creates a continuous and automated market for the token, allowing users to buy and sell the token at any time, while also providing liquidity to the market. The bonding curve concept is often used in decentralized finance (DeFi) applications, such as Automated Market Makers (AMMs) and token distribution mechanisms.
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