Token & LP Lock

There are differnces in how LBPs are conducted in V2 vs V1 that creators should understand before setting up their LBP.

Token Locking and Distribution in LBPs:

For creators using Fjord's Liquidity Bootstrapping Pools, a key aspect is the locking of tokens in the pool for the entirety of the LBP event. This ensures consistent liquidity and stable trading conditions. During the event, participants engage in trading a 'virtual' version of the token, addressing the need for reliable liquidity throughout the LBP. At the conclusion of the LBP, creators execute a 'close' function on the blockchain, facilitating the distribution of the actual tokens to participants. This final step also enables the withdrawal of liquidity directly to the wallet used for creating the LBP, completing the distribution process efficiently and securely​​.

Benefits

Greater Participant Confidence: The locking of tokens throughout the LBP event ensures stable and consistent liquidity, fostering greater confidence among participants in the reliability and integrity of the trading process.

Maintaining Exclusivity of LBPs: This method preserves the exclusivity of LBPs by preventing participants from withdrawing tokens prematurely or setting up their own LPs.

Support for Fjord's V2 Features: The token locking and distribution mechanism is integral to the functionality of Fjord's V2 features. It allows for the smooth implementation of advanced features like token vesting, ensuring that these innovative aspects work seamlessly within the LBP framework.

Flexibility for Advanced Funding Rounds: The model supports advanced funding strategies for tokens already in the market, such as offering discounted vested tokens in a Series B-style LBP funding round. This adds a strategic dimension for creators looking to raise funds without disrupting existing market tokens.

Process to follow at the end of the LBP

Close the LBP

At the end of the LBP you'll be asked to 'Close LBP', as shown via the following message below. This is required to withdraw the liquidity earnt throughout the LBP.

Complete & Withdraw Liquidity

Once the 'Close LBP' call function is complete, the tokens then be able to be redeemed by participants while the collateral tokens earnt by the LBP creator are automatically distributed to the wallet that was used to set up the LBP. Participants will see the below screen so they are able to redeem the tokens at any stage they come back to the page. If a vesting contract has been created, participants are also redirected to Sablier where they can view their vested token stream.