User FAQs

How Do Liquidity Bootstrapping Pools (LBPs) Work?

Liquidity bootstrapping pools offer a dynamic and equitable way for participants to acquire tokens, similar to Dutch auctions but with interactive pricing. Prices start high and can decrease over time, but buying pressure can of course increase the price.

What Advantages Do LBPs Offer Over Batch Auctions?

LBPs at Bazaar ensure a more equitable distribution of tokens by allowing dynamic pricing, preventing large investors from dominating the process. This means participants can enter the market at a price they find fair, promoting a broader and more fair distribution. LBPs also allow for organic price discovery, as participants can buy and sell at any point during the event. That being said, however, Bazaar will support batch auctions in the near future.

Understanding Weights in LBPs

Weights in an LBP refer to the ratio between the project token and a stablecoin, influencing the token's price over time. For example, a starting ratio of 95/5 would mean that 95% of the assets in the pool are the project’s token, while 5% of the assets are stablecoins. By understanding how weights shift, participants can strategize their entry point to maximize value.

Curated and Permissionless Launches on Bazaar

Bazaar offers both curated and permissionless launches for projects. Curated projects have undergone a review process for added credibility and visibility – however, there are always risks when participating in sales, making it important to DYOR.

Can I Provide Liquidity in Bazaar LBPs?

No, liquidity provisioning is restricted to LBP creators, who can add liquidity when initializing the pool. This ensures a smooth and fair token distribution process.

Why Aren’t Tokens Visible in My Wallet Immediately?

If you don't see your tokens post-purchase, you may need to manually add the token using its contract address in your wallet. Ensure that you've completed the purchase transaction, not just the approval.

When Will I Receive My Purchased Tokens?

Bazaar utilizes receipt tokens (rTOKEN), which are effectively 1:1 representations of the actual sale token. These receipt tokens are available in your wallet immediately after purchase, but have limited transferability. At the end of the sale, the sale creator will enable redemptions for the canonical token asset.

Can I Buy and Sell Tokens During an LBP?

Yes, Bazaar allows for both buying and selling during LBPs, supporting dynamic price discovery and enabling participants to engage fully in the process.

Are There Fees for Participating in an LBP?

For curated launches, Bazaar imposes a 0.50% protocol swap fee on transactions, whereas swap fees for permissionless launches are set to 1.00%.

What Are the Risks of Participating in an LBP?

Participation in LBPs involves risk, as outcomes regarding project success and token value are uncertain. We advise thorough research and consideration before engaging in any LBP – even if vetted and curated.

What Tokens Can I Use to Participate?

Participation is limited to specific whitelisted tokens (i.e. USDC, WETH) and chosen by the project. Ensure you have the correct token for participation by checking the LBP details.