The BBS Token Auction is near and it is done through Copper - the most open and user-friendly way to participate in a Fair Launch Auction (FLA)
I think it is time we talked about FLA.
Powered by Balancer’s LBPs, an FLA is a simple crowdfunding mechanism that enables projects and ideas from across the world to raise money from individuals in exchange for tokens representing a stake in the project.
A Balancer LBP is a permissionless price discovery method that allows projects and ideas from all over the world to distribute value to others without imposing entrance restrictions.
Powered by Balancer’s LBPs, an FLA is a simple crowdfunding mechanism that enables projects and ideas from across the world to raise money from individuals in exchange for tokens representing a stake in the project.
There are no barriers to entry. No middlemen, capital gatekeepers, or geographical constraints. No KYC or any sort of privilege favoring the interests of larger investors over those of smaller ones. Capital can now flow freely and directly toward empowering the ideas that deserve it, while enabling investors of all sizes and backgrounds to fairly participate and capitalize on these early stage opportunities.
The Alchemist project itself was started as a Fair Launch Auction.
An FLA is typically structured so that the price of the auctioned token starts high in the beginning of the auction and then gradually declines with time. (unless the buying activity of auction participants’ is high enough to offset the token’s weighted price fall).
As a result, FLAs give all auction participants a fair shot at becoming equal stakeholders in a project’s future, and empowers those participants to collectively decide what is the fair price for the project’s token at launch.
For projects, FLAs provide the ability to bootstrap liquidity in a capital efficient manner, (with minimal upfront capital), and this process results in a wider distribution of tokens between various holders.
The price of the auction starts high in order to disincentivize bots, front-running and price speculation. Over time, the price will automatically decrease by design through set weighting across the auction period.
A Fair Launch Auction thus effectively protects against front-running, and the historical ‘pump and dumps’ that have colored the token launch landscape in the past.
FLAs have the potential to fundamentally alter this space compared to the conventional ICO/IDO (Initial Coin Offering, Initial Dex Offering) style sales.
The BBS auction is almost here. As per the info I have gathered the FLA is a mechanism that offers many advantages over ICO , IDO etc. and is indeed a good method to launch a token. One major concern I have is that the value is decided by the buying activity. If the buying activity declines so does the value.
If a post on how to enter the auction and so on is required , please mention in the comments. I would rather avoid posting things you already know.
Have a nice weekend,
TheNewLegend