How Does a "Bonding Curve" Visually Represent the X Y = K Relationship? ⎊ Path

How Does a “Bonding Curve” Visually Represent the X Y = K Relationship?

A bonding curve is a graph where the x-axis represents the reserve of one token (x) and the y-axis represents the reserve of the other token (y). The x × y = k formula produces a hyperbolic curve.

Any point on this curve represents a valid state of the pool, and the movement along the curve during a trade visually represents the price change and the resulting token ratio adjustment.

How Does a Change in the Value of “K” Affect the Pool’s Price Curve?

What Is “Slippage” and How Does It Affect the Execution of a Large Trade on an AMM?

How Does the Concept of a “Bonding Curve” Generalize the Constant Product and Constant Sum Models?

Why Does the Price of a Large Trade Deviate More Significantly from the Spot Price Y/x?

How Can a DAO Use Inverse Perpetual Swaps to Manage Risk on non-USD Denominated Assets?

What Is a “Volatility Smile” and What Does It Indicate about the Black-Scholes Model’s Assumptions?

Why Is the Price in an X Y=k Pool Always Quoted as the Ratio of the Reserves, Y/x?

What Is a “Futures Curve” and How Is It Constructed?

Glossar

Bonding Curve

Mechanism ⎊ Bonding Curve describes a mathematical function that algorithmically determines the price of a token based on its supply.