Preparing to create a Liquidity Bootstrapping Pool
Things to consider and prepare for, before creating your LBP.
A LBP is a simple mechanism that enables projects and ideas from across the world to distribute value from individuals without barriers to entry. No more middlemen or capital gatekeepers. Any idea can now be bootstrapped by an invested community and thus established as a transparent and equitable partnership. So now you know what it is, what do you need to consider before embarking on launching your own? Read on to find out:
Prior to participating we recommend researching the following before deciding to participate in a LBP.
- 1.Number of tokens for auction
- 2.Total number of tokens to minted
- 3.Team and previous investor unlocks
- 4.Implied market cap
- 5.Reputation of the project team
- 6.Liquidity plans following the auction (where can I trade the token and how much liquidity will there be after the auction?)
- 7.Product positioning, will it succeed long term?
Anyone from across the world can create an LBP on our platform without interference. Please note that participating in any of these auctions is a high-risk endeavour and that the value of the tokens that you've received in exchange for contributing to such an auction might go to 0. Bounce is not liable for any losses incurred by using our platform.
Step 1 - Connect to your wallet
Click the “Connect Wallet” button in the top right hand of the screen and choose your wallet.
When you are connected via the Ethereum network, only auctions on Ethereum will show on the auction list.
Step 2 – Select a pool
Once you have selected the auction you wish to participate in, you will see the following screen.
As the auction type is Dutch auction, the price decay model will moves from a high market cap, to a low market cap depending on the weights set up by the auction creator.
This also means that it is important to be wary at the beginning of the auction, as teams will typically set a higher price at the start of the auction to prevent the sniper bots. If there are no new buyers at the higher early prices, the price then reduces over time to a more realistic market cap/price.
Step 3 – Buy the launch token
Input the number of currency token, and sign the transactions.
Enough buying activity will shift the price decay curve up but not override it.
Step 4 – Overview
You can check all the pool details and transaction history below.