Guide · Basics
Bonding curve explained
A bonding curve is a program that prices a token by how much of its supply has been sold; in the mainnet config it runs from a 30 SOL to a 400 SOL market cap. Every buy raises the price, every sell lowers it, and the program is always the other side of the trade.
How the price moves on a bonding curve
A bonding curve replaces the order book with a formula. The curve program holds the unsold tokens and the SOL that buyers paid. When you buy, you send SOL to the program and receive tokens at the price the formula gives for the current supply sold. Each buy leaves fewer tokens in the curve, so the next buyer pays a bit more. When you sell, you return tokens and receive SOL back at the price for the new, lower amount sold.
Two things follow from that. The price only depends on how much has been bought and sold, not on who is offering what. And the curve always quotes a price, so while a coin is on the curve you can always buy or sell, at whatever price the curve gives.
The numbers on KABOOM!
Every Solana coin launched here uses the same curve. These values come from the config in the code. The mainnet config is the one coins launch with; the test config is used only in our own test runs.
| Parameter | Mainnet config | Test config |
|---|---|---|
| Market cap when trading starts | 30 SOL | 1 SOL |
| Market cap at migration | 400 SOL | 10 SOL |
| Supply | 1,000,000,000 tokens | 1,000,000,000 tokens |
| Maker allocation | 5%, vests after migration | 5%, vests after migration |
| Trading fee on the curve | About 2% | About 2% |
| Pool after migration | Meteora DAMM v2, 1% fee tier | Meteora DAMM v2, 1% fee tier |
The test curve is smaller so a test can reach migration with little SOL. Full derivation: method page.
Where the SOL goes
- Buys and sells: the SOL you pay for tokens is held by the curve program and paid out on sells.
- Fees: about 2% of each trade accrues on-chain in the pool. On the nominal 2% that is 0.4% for Meteora, 1.104% for the platform and 0.496% for the maker: 20% for Meteora, and of the rest 69% for the platform and 31% for the maker. The platform wallet and the maker each claim their share.
- Migration: when the curve completes, the SOL in the pool becomes the liquidity of the DAMM v2 pool, with no migration fee taken. 100% of that liquidity is permanently locked, split 50/50 between a platform position and a maker position.
Fees before and after migration
| Phase | Fee per trade | Notes |
|---|---|---|
| First 60 seconds (the mainnet config) | 50% falling to about 2% | Anti-sniper window, falls exponentially in 30 steps. The test config uses a 30-second window. The maker's dev-buy pays the normal fee. |
| On the curve | About 2% | On the nominal 2%: 0.4% / 1.104% / 0.496% for Meteora, platform and maker. The coin page shows the exact on-chain fee. |
| After migration | 1% pool fee tier | Charged by the Meteora DAMM v2 pool. |
Bonding curve vs. liquidity pool vs. order book
| Bonding curve | Liquidity pool (AMM) | Order book | |
|---|---|---|---|
| Who sets the price | A fixed formula on the amount sold | The ratio of the two tokens in the pool | The best open buy and sell orders |
| Where the liquidity comes from | The SOL buyers paid into the curve | Liquidity providers deposit both tokens | Traders who leave orders |
| Can you always trade? | The curve always quotes a price while the coin is on it, which can be far below what you paid | Yes, at a worse price as the pool thins out | Only if someone is on the other side |
| Typical use | The launch phase of a new token | After a token graduates | Exchanges with active market makers |
What a bonding curve does not do
A curve makes the rules visible. It does not create demand, and it does not stop a few wallets from buying a large share of the supply early and selling it later. The price can fall back down the curve as fast as it went up, and after migration it can keep falling in the pool. That is whyKABOOM! plans a disclosure badge for how concentrated the early buyers were. The bundle layer of the disclosure badge is live; cluster figures are not live yet, so no cluster number is shown. The rug pull guide covers what to check, and the launch guide covers the maker side.
Frequently asked questions
What is a bonding curve in crypto?
A bonding curve is a smart contract that sells a token at a price set by a formula: the more of the supply has been bought, the higher the price. You buy from and sell to the contract itself, so there is no order book and no separate liquidity provider while the coin is on the curve.
What does it mean when a token migrates?
Migration, also called graduation, is the moment the curve is complete. In the mainnet config that happens at a market cap of 400 SOL: the SOL in the curve becomes the liquidity of a Meteora DAMM v2 pool with a 1% fee tier. After migration the coin trades in that pool, outside this app's trade panel.
At what market cap does a KABOOM! coin migrate?
At 400 SOL in the mainnet config, with trading starting at 30 SOL. The test curve (used only in our own test runs) is smaller, from 1 to 10 SOL, so a test can reach migration.
Can the price on a bonding curve fall?
Yes. Every sell moves the price back down the same curve, at most to where it started. Anyone who bought higher up can lose most of what they paid, plus the fees. After migration the coin trades in a normal pool, where the price can keep falling.
Who sets the shape of the bonding curve?
The platform's on-chain config, the same for every coin launched on KABOOM!. The maker does not pick it. The method page derives every number from that config.
What fee do I pay when I trade on the curve?
About 2% per trade, because the on-chain fee schedule rounds to whole basis points. On the nominal 2%, 0.4% goes to Meteora, 1.104% to the platform and 0.496% to the maker. In the mainnet config, the fee starts at 50% in the first 60 seconds after launch and falls to about 2%.
Does a bonding curve reduce risk?
It changes where the risk sits. A curve always quotes a price, but you may sell at a large loss. On KABOOM! the pool liquidity is permanently locked after migration. A curve does not stop a few wallets from buying most of the early supply and selling later, which is what the disclosure badge measures.
Keep reading
- How to launch a Solana tokenThe 5 steps of a Solana launch: wallet, name and image, optional dev-buy, simulated cost, one signature. Launches open on Solana mainnet.
- How to spot a rug pullA 5-point check before you buy a new token: supply held by insiders, maker lock, LP lock, mint and metadata authority, and bundled early buys.
- MethodHow the disclosure badge is measured, the launch rules every coin shares and how the trading fee of about 2% is split.
- FAQLaunches open on Solana mainnet. Answers on costs, the fee split, maker vesting, LP lock, disclosure and risks.