How to Participate in a LBP
Follow these step by step instructions to learn how you can participate in an LBP on Fjord.
Last updated
Follow these step by step instructions to learn how you can participate in an LBP on Fjord.
Last updated
Note: This video will be updated to reflect V2 in the coming weeks and currently works for V1.
Fjord Foundry offers a straightforward and transparent way to participate in Liquidity Bootstrapping Pools (LBPs). LBPs on Fjord enable global projects to distribute value via tokens through community backing, fostering transparent and equitable partnerships via a dutch auction style of distribution. This approach democratises access to early-stage opportunities for everyone!
Note: The tutorial primarily focuses on participation using Ethereum, but the process is similar across other networks like Avalanche and Arbitrum where Fjord is available.
Depending on what LBP you are looking to participate in you will need to hold a funding token. This is the token that will be used to buy into the token that’s being launched through the LBP. On Fjord, common funding tokens are USDC, DAI, WETH (a wrapped version of ETH), and ETH.
To install Metamask, go to MetaMask.io and select from Android or iOS for mobile application and select Chrome for desktop. You can also go directly to the Chrome store, Google Play store, or Apple App Store (soon). Click the download button. For users on a desktop, you can click the download button in the main nav as per below.
Once you have installed the Metamask wallet, please ensure that you follow the prompts on the Metamask UI to correctly set up the wallet.
Once you have installed the Metamask you will need to send the funding token required to your metamask wallet. LBPs hosted on the Ethereum network will need to have ERC-20 funding tokens to buy into them. Please ensure that you are sending this correctly from the exchange or other platform used to obtain the funding tokens. You can then send the tokens to your Metamask Ethereum ERC-20 wallet.
Now you have your funding tokens in your wallet, you can visit the https://fjordfoundry.com website, and connect your wallet. Click the “Connect Wallet” button in the top right hand of the screen and choose your wallet.
Your wallet will show it is connected once the “Connect Wallet” button in the previous section shows part of your wallet address.
Once you have selected the LBP you wish to participate in, you will see the following screen. The contents of the screen may vary depending if the LBP is yet to start, in progress or concluded. The below example is an example of an LBP that is in progress. Please note this is an LBP being run on a test network.
LBP Research
Prior to participating we recommend researching the following before deciding to participate in a LBP.
Number of tokens in the LBP
Total number of tokens minted
Team and previous investor unlocks
Implied market cap
Reputation of the project team
Liquidity plans following the LBP (where can I trade the token and how much liquidity will there be after the LBP?)
Product positioning, will it succeed long term?
You can find some additional LBP participant tips here.
Buying strategy
The buying strategy for Fjord Foundry's LBPs involves a more equitable distribution due to its unique price decay model. Initially, tokens have a high price to deter bots and large investors from monopolizing supply. The price then gradually lowers to a more realistic level, allowing participants to enter at a price they find fair.
This strategy requires participants to be cautious and make informed decisions about when to buy, as the initial high prices eventually adjust based on market response and the token's weighted setup in the LBP.
Based on all of the factors you have taken into consideration and the price is at a point where you feel it is fair market value, you can begin your purchase.
In the above example on testnet, we are using WETH to buy into the pool. Input the amount of WETH tokens you wish to buy in with.
Input the amount of tokens you wish to purchase.
Prior to the purchase occurring, you may need to approve the tokens via your Metamask. This can be done by clicking the “Approve” button. On the Ethereum network, there is a fee associated with this. This fee can vary depending on the price of Ethereum gas at the time. We recommend using the Metamask recommended fee to complete your transactions.
Once the tokens have been approved your transaction will be ready to purchase, which you can do by clicking the Swap button.
Process the transaction in your wallet. Once the transaction is complete, you will see a project token balance.
Note: When you participate in a V2 LBP, you trade a representation of the actual tokens, ensuring constant liquidity throughout the event. At the end of the LBP, you must redeem to receive the actual tokens into your wallet. Learn more in the Token and LP Lock section.
Redeeming Your Tokens Post-LBP
At the end of the LBP, you are required to redeem your tokens. Executing the redeem function will transfer the actual tokens to your wallet. In the case of vested tokens, a link to Sablier will be provided to view your vesting stream, as demonstrated in the interface.
Closing the LBP
While participants can initiate the closing of the pool, this is typically performed by the LBP creator. In most instances, you'll find that the pool has already been closed for you, and you can proceed directly to redeem your tokens.
Once this swap is done, voila! You will have your tokens. If you can’t immediately see the tokens in your wallet, read on below for our FAQ as to why they may not be showing.
