The problem it solves

Normally, launching a token means supplying liquidity: you pair your token with something valuable such as ETH, BNB or a stablecoin, then deposit both into a pool so people can trade against it. That costs real money before anyone has shown interest, and if nobody turns up, it is gone.

A bonding curve removes that step. Your token trades from the moment it is created, and the money to back it arrives from the buyers themselves.

How the price works

Instead of a pool of two assets, there is a formula. The contract holds the entire supply and sells it according to a curve: the more that has been sold, the higher the price of the next one. Selling back moves the price the other way.

This means the first buyer pays the least and every buyer after pays more than the one before. There is no order book and no counterparty. You are always trading with the curve itself, so there is always liquidity, at some price.

Graduation

A curve is not meant to run forever. Once enough has been raised, the launch "graduates": the contract takes the accumulated funds, pairs them with the remaining tokens, deposits the lot into a real DEX pool, and locks it.

From that point the token trades on the open market like any other, and the locked liquidity cannot be pulled, which is the specific rug-pull that liquidity locking exists to prevent.

What to be careful about

Early buyers hold a much lower cost basis than later ones, so a curve rewards being early and punishes chasing. Price impact on a thin curve is severe: a large buy moves the price against you significantly within the same transaction.

A curve that never graduates simply sits there. There is no deadline and no refund. Unlike a presale, the money does not come back if interest never materialises.