> For the complete documentation index, see [llms.txt](https://whitepaper.myosin.xyz/home/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://whitepaper.myosin.xyz/home/usdmyo-tokenomics/bonding-curve.md).

# Bonding Curve

A [**Bonding Curve**](https://yos.io/2018/11/10/bonding-curves/#:~:text=A%20bonding%20curve%20is%20a,between%20price%20and%20token%20supply.\&text=This%20bonding%20curve%20says%20that,number%20of%20tokens%20minted%20increases.) 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.](/files/dGxWMW79iEIxxeSlca4j)

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.