What is a bonding curve?

A bonding curve is a formula that changes a token’s mint or redemption rate as its supply changes.

Imagine a ticket counter that raises the price after every group of tickets sold. The next buyer may get a different rate from the last buyer even though both use the same contract.

A little more technical

A smart contract reads the token’s current supply and applies a published formula. A rising curve makes later mints cost more of the collateral asset. Burning tokens can lower supply and move the rate back down, if the contract allows it.

For 0G’s iAI, the issuer says the curve begins at 1,221 0G per iAI when public minting opens and becomes much steeper near its 9,270-token ceiling. The rate is in 0G, so its dollar value also moves with 0G’s market price.

Common misunderstanding

A bonding curve is not a guaranteed market price. The contract’s mint rate, the price on an exchange and the amount a seller can actually receive can all differ.

Source: 0G’s technical breakdown publishes the formula and launch parameters used in this example. We have not independently audited that contract.