Beethoven X: Introducing Liquidity Boostrapping Pool Launch Platform
Dear Friends, Dear Ludwigs,
Our favorite thing in the entire world, and throughout our 251 undead years on this planet, is creating something new.
When composing, jamming is our favorite mode of creation, from deep within an idea for verse and rhyme bubbles to life, at first a few hesitant chords ring out and soon an orchestra is vibing with sound, joy and glory.
This epic feeling of creation is now in your hands dear friends, because today we introduce the new UI for the creation of permissionless Liquidity Bootstrapping Pool Launches on Beethoven X.
At its heart using a Liquidity Bootstrapping Pool (LBP)is the fairest, open and user-friendly way to participate in a token launch. The LBP mechanism is comparable to a crowdfunding that enables any kind of crypto project to raise capital from individuals all around the globe. Whales, middlemen, thirdparties geographies do not create an advantage, or disadvantage, and capital can flow freely to projects that the community deem deserving of it. The liquidity bootstrapping pool was originally developed by Balancer Labs and has now been brought to life on Beethoven X and the Fantom network.
In an Liquidiyu Boostrapping Pool Launch, in most cases, the price of the launch token is designed to decrease over the duration of the liquidity generation event. A high starting price disincentivizes bots, front-running and speculation. In a LBP, the launch token and the collateral token weighting within the pool changes (for example from 95–5 to 50–50) over the event thus creating the downwards pressure on price and the amplification of the starting capital. In reality, as anyone is able to buy or sell at any point during the event the buy pressure can outweigh the planned decay and the price can rise with demand.
Key Characteristics of fairer launch auctions using a LBP:
- Price Discovery — In the LGE the price starts at one point and follows a preconfigured price decay curve (in most cases, as the price is free to go up with buying pressure or the team could inverse the start- and end-weights) over the duration of the liquidity generation event. The price decay can be offset by buying pressure at any stage of the LGE. Therefore, price discovery for a new token happens freely as the fair value is found in an open and transparent manner. A “pre-sale” price does not become a metric disincentivizing later investors.
- The LBP is permissionless — Anyone can freely launch tokens and any user can participate in liquidity generation events. There are no listing requirements or whitelists.
- Fair Token Launch — In a liquidity generation event via the LBP, it is not a race to be the first in order to battle bots or high gas fees to get your transaction through. Anyone can buy into or sell out of the LBP without limitations at any point during the LGE. This makes price discovery a self regulatory process and the token launch a much fairer distribution event.
- Capital Efficiency — Setting the weights allows the initial price of the token to be magnified by a factor of up to 99 in relation to the initial collateral deposited with it. The initial collateral can be withdrawn in full (provided the launch token does not previously exist outside the LBP, enabling someone to sell into the pool).
Beethoven X is a permissionless platform meaning anybody can create an auction and LBP on the platform.
- Any auction listed on the platform is indexed by Beethoven X directly based on the information the protocol or project has entered on the blockchain.
- A project being listed on Beethoven X does not imply an endorsement or support of said project by Beethoven X or it’s community.
- Participating in any fair launch auction is a high-risk endeavour and the value of tokens your have received for your contribution might go to 0.
- Beethoven X is not responsible for any losses incurred by using our platform. All users considering participating in a LBP auction should “do your own research”.
- Helpful pointers as to what potential users can look for in launching projects can be found here.
Pool creation is easy and requires the team to complete a few steps which are documented in the docs, found here. Please note that we strongly suggest teams use a multisig wallet and the UI will warn users should this not be the case.
There will be a 2% fee applied on the collateral raised (endCollateral — startCollateral * .02). This fee will flow fully to the Beethoven X DAO treasury.
We hope that the liquidity bootstrapping pool for liquidity generation events will motivate many new projects to launch their token in a fairer and more transparent manner reducing the stress for all parties. Additionally, we hope that this will see a plethora of new projects join the Fantom ecosystem and co-create beautiful symphonies in this amazing community.
Christmas can truly come early this year and so the music continues to flow.