Curve mechanics: pricing, fees and depth
A bonding curve is a pricing function held by a program. There is no order book, no market maker and no passive counterparty. This desk covers what follows from that.
Why the mechanism comes first
On a constant-product pool, price emerges from the ratio of two reserves that other people supplied. On a bonding curve, price emerges from a formula the program evaluates against a single reserve that grows and shrinks as people buy and sell. Nobody is quoting you. Nobody can be persuaded to widen or tighten. The quote is arithmetic.
That single structural difference explains most of the confusion around launchpad tokens. It explains why the first buy of a launch moves price by a visible percentage, why sell pressure translates into price movement with no delay, and why the shape of the curve determines the cost of participating far more than any fee schedule does.
The notes on this desk take that mechanism apart in two directions. One direction is pricing: what the curve is, what the reserve does, how a quote is produced, and what slippage means when there is no counterparty to blame for it. The other direction is cost: the four separate charges that stack on a single swap, and how their relative weight changes as swap size moves from very small to reasonably large.
What you should be able to do afterwards
By the end of this desk you should be able to look at a proposed swap, say roughly what fraction of it disappears to cost before any price move, and say whether the dominant cost is a flat fee or a curve effect. That distinction is the difference between a strategy that works at small size and one that only works at large size.
You should also be able to explain, without hand-waving, why two tokens showing the same volume figure can have completely different depth underneath them, which is the point where this desk hands off to the volume data desk.