RateKite

What is a bonding curve?

A bonding curve is a pricing formula that a launchpad uses to sell a new token before it has a normal DEX pool. Each buy moves the price up the curve and each sell moves it down. When enough has been bought, the token 'graduates': its liquidity moves into a regular pool on a DEX. Many Solana memecoins start this way.

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How it works

The launchpad's program holds the token's supply and the SOL paid in, and quotes a price from a formula instead of from other traders' orders. Pump.fun, for example, describes its curve as constant-product math over two virtual reserves, so the price rises as the token's reserve is bought down (pump.fun docs).

When the token reaches the launchpad's threshold, the curve closes and its liquidity is moved into a DEX pool. Pump.fun states that this migration to PumpSwap is automatic and irreversible, and that the resulting pool is owned by the protocol rather than by the creator.

What it means for risk

  • The creator usually cannot pull the curve's liquidity. It is held by the launchpad's program, and on pump.fun the migrated pool belongs to the protocol. That removes one rug-pull route, not the others: see rug pulls and liquidity locks.
  • Early buyers still hold a lot. Wallets that bought in the first seconds can sell into the curve or the new pool. Check holder concentration.
  • Most tokens never graduate. A token that stalls on the curve has little trading, and its price depends only on the next few trades.
  • Graduation is volatile. The move to a DEX pool often brings a burst of trading, and a sharp move in either direction.

How RateKite treats bonding-curve tokens

Data providers often do not report liquidity for a pair that is still on a bonding curve. RateKite treats unknown liquidity as a risk: it adds 20 points to the Risk Score and caps the Momentum Score at 50, so a curve token cannot look like a strong, liquid market. After graduation, the token is scored on its DEX pool like any other. The rules are in the methodology.

Frequently asked questions

What does it mean when a token graduates?
Its bonding curve has filled up to the launchpad threshold, and its liquidity has been moved into a regular DEX pool where it trades like any other token.
Is a bonding-curve token less risky because liquidity cannot be pulled?
It removes one risk only. Early buyers can still sell large holdings, most tokens never graduate, and prices on the curve move sharply with each trade.
Why does RateKite show liquidity as unknown for some new tokens?
Pairs still on a bonding curve often have no reported pool liquidity. RateKite counts that as a risk factor rather than ignoring it.