# Bonding Curve

A [**Bonding Curve**](https://yos.io/2018/11/10/bonding-curves/) defines the relationship between the price and token supply.

The lower the reserve ratio in a bonding curve, the higher the effect of each buy on the value of tokens. In a lower bonding curve, at a \~25% reserve ratio, each redeemed token increases the value of other tokens, due to limited supply and growing demand.

![There are many types of curves - we have chosen a quadratic bonding curve.](https://4292621235-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FSkhFyFTHlWKYTwGl6dW8%2Fuploads%2FhEezVkMY8GZ4PoUplRlW%2FScreen%20Shot%202022-03-04%20at%201.36.20%20PM.png?alt=media\&token=c5d1658c-4af9-4539-b2cf-436d1adc1156)

We have chosen to target a Reserve Ratio of 25% in order to best reward early backers and members of $MYO, who will be purchasing tokens at a lower initial price.

As demand for $MYO increases over time through the open markets and our own client services, and the planned $MYO distributions from the Community Treasury continue to decrease over time, the price of $MYO should increase exponentially.