1. What is the difference between Token Launch Auctions (TLAs) and Liquidity Bootstrapping Pools (LBPs)?

Token Launch Auctions (TLAs) are a specific application of Balancer’s Liquidity Bootstrapping Pools (LBPs). LBPs and their trading data are stored on the Ethereum network and Copper provides a user interface that enables anyone to more easily create TLAs and/or participate within them
For a Balancer Liquidity Bootstrapping Pool (LBP) to qualify as a Tair Launch Auction (TLA), and be accessible through Copper, it needs to meet the following criteria:
  1. 1.
    The LBP's token list consists of exactly two tokens.
    • An ERC20 token corresponding to the auctioned launch token.
    • A collateral token that has been deposited along with the launch token. Copper currently only supports DAI, USDC, or WETH as the collateral tokens, but we might expand this list in the future.
  2. 2.
    The LBP was scheduled to undergo a gradual weight change.
To read more about LBPs please refer to Balancer documentation:

2. What is the difference between v1 and v2 Token Launch Auctions (TLAs)?

V2 TLAs makes for a significantly better user experience as the rely on Balancer v2 Protocol LBPs rather than v1 LBPs:
  • the need for poking is completely removed and is incorporated into the trades
  • max weights are 99-1 vs 96-4, further maximizing the possible price discovery
  • no complexity around pool rights. there are just 2 rights and they're always enabled: starting/stopping trading, and changing the swap fee

3. How should I choose a starting price?

You can think of the starting price of your TLA as the ceiling you’d want to set for the token sale. This may seem counterintuitive, but since TLAs work differently than other token sales, your starting price should be set much higher than what you believe is the fair price.
This does not mean you’re trying to sell the token above what it’s worth. Setting a high starting price allows the changing LBP weights to make their full impact, lowering the price progressively until a market equilibrium is reached. Unlike older token sale models such as bonding curves, TLA buyers are disincentivized from buy early, and instead benefit from waiting for the price to decrease until it reaches a level they believe is fair.
For example, if you believe the fair price for your token is $1, you may want to consider an opening price that is up to $10.

4. What's the difference between a batch auction and an TLA?

In Batch Auctions, a set amount of tokens are divided amongst individuals according to their contribution size. Nice and even across time, but this approach has its faults. It’s prone to be co-opted by whales, and can encourage botting or front-running to accumulate a large share
TLAs start at a high price (probably more than you’d want to pay) and decrease according to a negative exponential curve. The price also moves when people buy in -- the more people buy, the higher the price goes.
So if the decay curve is giving you too high a price, you can just wait for it to go down. But don’t wait too long or other people might drive the price back up. See below for an example chart:
Using an TLA has several advantages over Batch Auction. It allows the purchaser to know exactly how many tokens they will get for their money.
It gives the purchaser more flexibility to get in at a price point that works for them. And it gives the token itself more integrity, as the price can reach a natural floor where demand matches the decay curve.
Credit: Jawn D Twitter

Last modified 15h ago