Bonding Curve

Technical details on bonding curve mechanics and configuration.

📐 What is a Bonding Curve?

A bonding curve is a mathematical function that defines the relationship between a token's supply and its price. On DibDex, bonding curves provide automated market making during the preorder and TGE phases.

💡 Key Concept — A bonding curve automatically adjusts a token's price based on its supply. The more tokens that are purchased, the higher the price goes. Early participants benefit from lower prices.

⚙️ How It Works

The bonding curve contract holds a reserve of the native chain token (e.g., ETH, BNB). As users purchase tokens:

1. They send native tokens to the bonding curve contract
2. The contract mints new tokens according to the curve formula
3. The price automatically increases as supply grows

When selling, the process reverses — tokens are burned and native tokens are returned from the reserve.

🔧 Curve Parameters

Creators can configure the following parameters:

⚖️ Reserve Ratio

The reserve ratio determines how much of the purchase price is held in reserve vs. allocated to the ecosystem. A higher ratio means more stable pricing.

💲 Initial Price

The starting price of the token at zero supply. This sets the floor for the bonding curve.

📊 Supply Cap

The maximum number of tokens the bonding curve will issue before transitioning to DEX trading.

⚠️ Immutable After Deployment — Once the bonding curve is deployed, its parameters cannot be changed. The reserve ratio, initial price, and supply cap are permanently locked in the smart contract.

📝 Example

// Simplified bonding curve calculation
function calculatePurchaseReturn(
    uint256 supply,
    uint256 reserveBalance,
    uint32 reserveRatio,
    uint256 depositAmount
) public pure returns (uint256) {
    // Price increases as supply grows
    // Returns number of tokens to mint
}

🔄 Transition to DEX

When the supply cap is reached or the TGE period ends, the bonding curve transitions all liquidity to a standard DEX pool. This is an irreversible, automatic process handled by the smart contracts.

🔒 Automatic & Irreversible — The transition from bonding curve to DEX trading happens automatically and cannot be reversed. All accumulated liquidity moves to the DEX pool, enabling open market trading.