Learn more about how Zero Liquidity LBPs work and how to set one up on Fjord for your LBP.
Note: This feature is not live yet
Fjord is proud to present an innovative addition as part of our V2 release, Zero Liquidity LBPs. This unique offering starts as a virtual automated market maker (vAMM) — meaning initially, it's configured without any initial liquidity put up in the pool. It's set to transform the way projects launch tokens and how users participate in these events.
How Zero Liquidity LBPs work
Initial Setup: Your LBP starts in a 'virtual' state where your project token doesn't require real assets like stablecoins for the initial setup. The starting price isn't fixed by actual deposits but is calculated based on a mix of real and 'virtual' assets.
First Purchase Influence: When a buyer makes the first purchase with actual tokens such as USDC or WETH, the system blends this with the virtual setup to continue the planned pricing journey based on the price curve pre determined by the creator.
Continued Trading: After this first transaction, your LBP moves into a regular trading phase where the token price changes with market activity, just like traditional LBPs.
This new approach to LBPs offers several advantages.
Accessibility for All: Zero Liquidity LBPs eliminate the need for upfront capital, enabling anyone to bootstrap their ideas without financial barriers.
Reduced Risk: This approach minimises the capital risk for creators, as there is no need to put in any up front liquidity.
How to create a Zero Liquidity LBP
Navigate to Sale Structure: During the creation of your LBP, step 2 will focus on the sale structure of your pool.
Select Liquidity Option: When prompted with 'Do you have liquidity for your LBP?', choose 'No'. This indicates that you’re opting for a Zero Liquidity LBP.
Continue: Click on the 'Continue' button to move to the next step.
Step 2: Tokenomics and Preview
From here the process is exactly the same as it is for normal LBPs. Input your number of tokens. Choose what collateral you would want to receive (USDC, WETH) and input how much virtual collateral you wish to put up.
Setting Up Token Quantities: Input the amount of your project tokens for the LBP and select a collateral token (like USDC or USDT) for backers to use in purchasing your tokens.
Configuring Token Weights: Determine the initial weight of your project token to set its starting value and the final weight to manage the price reduction over the LBP duration.
Defining the LBP Duration: Choose the start and end dates, marking the availability period of your token.
Previewing Price Trajectory: Use the Price Discovery Preview to visualise the impact of your settings on the token's price during the LBP.
Step 3: Finalise Your LBP Details
Input Additional Information: Fill in the rest of the details as directed by the platform, including your token information, pricing strategy, and any other required fields and continue.