How a Solana bonding curve prices a token, and what changes at graduation

Most new Solana tokens start life on a bonding curve rather than in a trading pool. This lesson asks what that curve does to the price when you buy, what happens when the token graduates to a trading pool, and which of the things people say about curves are wrong. The mechanics below are the ones our own Scanner uses to model a pump.fun style launch.

What a bonding curve is

A bonding curve is a formula that sets a token's price from how much of the token has been sold. There is no order book and no other trader on the far side of your trade. You buy from the curve and sell back to it, and the formula moves the price each time.

The pump.fun style curve is a constant-product formula, the same shape a trading pool uses. The curve holds two balances, one of SOL and one of the token, and the product of the two stays fixed. The price is the SOL balance divided by the token balance. When you buy, SOL goes in and tokens come out, so the SOL balance rises, the token balance falls, and the price rises. When you sell, the reverse happens. Each buy makes the next buyer pay more.

The curve starts with a virtual SOL balance so the first price sits above zero. That starting balance, and the shape of the formula, mean the price climbs gently at first and steeply as the curve fills.

The fixed supply

A pump.fun style token has a fixed supply of one billion. Nobody can mint more. Roughly four fifths of that supply is sold on the curve. The remaining fifth is held back for the trading pool the token will move to at graduation. A holder's share of supply is a share of a known number, which is what makes the holder percentages on a scan mean something.

Market cap on a curve token is the current curve price multiplied by the whole one billion, including the fifth that is not yet for sale. It is a formula result. On a young token it can be a large multiple of the SOL anyone has deposited.

What graduation is

The curve ends when its tokens are sold. At that point the real SOL that buyers deposited, and the fifth of supply held back, move into a trading pool on a decentralised exchange, and the token trades there from then on. Our Scanner models the graduation point at roughly eighty-five SOL of real deposits. The launchpad sets that threshold and can change it, so read it as a fixed SOL threshold rather than a fixed dollar figure. Trading on the curve carries a small fee on each buy and sell, and the pool it moves to carries its own.

Two things change at graduation. You are now trading against a pool that other people can add to, so the depth of the pool is no longer fixed by a formula. And the pool's liquidity tokens are burned at creation, so nobody can withdraw that starting liquidity. The curve had the same property: nobody can pull a bonding curve. That protects you from one kind of rug, the pulled pool. It does nothing about the other kind, a holder who owns a large share of supply and sells it.

What people get wrong about slippage

An older version of this page said that slippage rises with market cap on a burned-liquidity pool, and that this traps large holders. That is wrong, and we have removed it.

Slippage is how far your own trade moves the price. It depends on the size of your trade against the depth of the pool, and on nothing else. A pool holding around a hundred SOL will move a great deal when someone sells tokens worth a tenth of it, whatever the market cap says. The market cap can be in the millions while the pool holds a few tens of SOL, because the market cap multiplies the price by a billion tokens, most of which have never been for sale.

The practical rule follows. The pool is the number you can sell into. The market cap is the number on the chart. The lesson on market cap and liquidity in this track goes deeper.

What the curve cannot tell you

The curve prices the token. It does not know who bought it.

Our logs say the first buyers decide a lot. On Solana, as recorded in our logs, calls where our first scan confirmed a bundle, a group of first buyers funded from one place, reached 2x 14.4% of the time and 10x 1.7%, with 62.5% going flat or down (n 2,567). Calls where the scan found no bundle reached 2x 24.3% and 10x 3.1%, with 49.7% flat or down (n 4,102). Those scans ran a median 0.4 minutes after we first saw each token. A clean-looking curve says nothing about a bundle sitting on it.

The Scanner at /scan answers "Did insiders load the launch?" with that read: who funded the early buyers, how much supply they still hold, whether they have sold, and what the pool could pay them at today's price. "Can I get out?" covers the keys the developer kept and where the liquidity sits. The curve itself answers neither question.

For the base rates behind any new token, on a curve or off it, read the base-rate lesson in this track. More than half of the Solana calls we logged never got 10% above entry.

What this does not tell you

The constants above describe the pump.fun style curve as our code models it. Other launchpads use other formulas and other thresholds, and a launchpad can change its own.

A curve price is a formula result. It is not evidence that anyone would pay that price for your whole position.

Graduation moves liquidity. It does not grade the token, and a graduated token with a bundle on it is the same token it was an hour before.

Nothing here predicts where a price goes after launch.

What to do next

Paste the next curve token someone sends you into /scan and read "Did insiders load the launch?" and "Can I get out?" before you look at the chart. Then read the base-rate lesson at /learn so the chart has a denominator.