Bonding Curve: y = k/(s-x)

How does this bonding curve work?

The formula y = k / (s − x) defines a type of bonding curve where the token price increases as more tokens are bought. Here, x represents the tokens that have been bought, s is the maximum supply, and k is a constant that controls how fast the price rises.

When x is small, the denominator (s − x) is large, so the price is low. As more tokens are minted and x approaches s, the denominator shrinks, causing the price to increase rapidly and eventually approach infinity.

This creates a strong incentive for early buyers, since they can purchase tokens at a much lower price than later participants.

Advantages and limitations

One of the main advantages of this model is its simplicity and predictability. The price is fully determined by the formula, so there is no need for order books or external market makers.

However, the curve becomes extremely steep near the end, making tokens prohibitively expensive and reducing accessibility. It also does not account for real market demand, which can lead to overvaluation.