Binance Reveals Bonding Curve Feature—But It’s Not Like Solana’s Pump.fun

Binance, the world’s largest centralized crypto exchange, is introducing a new “token generation event model” for its Binance Wallet. It will utilize the bonding curve mechanism that was popularized by Solana meme coin launchpad Pump.fun.

However, unlike Pump.fun, users will be required to apply to launch a token on the platform. 

The new feature comes as part of a growing suite of token generation event products offered by Binance Wallet. Projects are required to apply to launch a token via the suite. That prerequisite will remain the same as the exchange introduces a bonding curve feature, a Binance spokesperson confirmed to Decrypt.

By comparison, anyone can create a token on Pump.fun, free of charge, after filling out a short form. As a result, the platform sees more than 10,000 tokens created every day, with more than 11.8 million tokens created since the launchpad rolled out in January 2024. 

Despite the social media buzz around the Binance Wallet announcement, it will not be a direct competitor to Pump.fun or other launchpads like LetsBonk.

That said, the new feature was created in collaboration with Four.meme, a Binance Smart Chain-based launchpad that uses a bonding curve to bootstrap token creation. At the time of writing, the top Four.meme-created token is EGL1, which has a $92.1 million market cap. 

“The first bonding curve-based TGE is in collaboration with Four.meme and will be on BNB Chain,” a spokesperson told Decrypt. “Bonding curve-based TGEs may also be supported on other chains in the future.”

The first project that will use Binance’s bonding curve model will be announced on Wednesday, via the official Binance Wallet X account.

What is a bonding curve?

Before the creation of bonding curves, coin creators would often raise capital through token pre-sales that would provide liquidity for the launch. During these pre-sales, participants would all purchase the token at the same price—meaning there was no benefit to trading during the pre-sale.

By contrast, a bonding curve allows users to dynamically trade a token before it has officially launched. It also allows the team to raise enough capital to provide liquidity.

“A bonding curve is a dynamic pricing model where the token price is adjusted automatically based on the number of tokens purchased directly from the bonding curve contract during the Token Generation Event,” the Binance blog said. “As more tokens are purchased, the price gradually increases along a predefined curve.” 

When the bonding curve is complete, the Binance tokens will be listed on Binance Alpha, a Binance Wallet platform meant to showcase smaller projects. It also enables trading via decentralized exchanges. Some of the tokens in Alpha are “considered” for listing on Binance’s centralized exchange—but it’s not guaranteed.

“Binance Wallet will offer two types of [token generation events]: fixed-price and bonding curve,” a spokesperson told Decrypt. “We introduced bonding-curve TGE to provide users with more choices by offering different ways to participate in TGEs.”