What is a Token Launch Auction?
Token Launch Auctions (TLAs) are a specific configuration of Balancer’s Liquidity Bootstrapping Pools (LBPs). Their primary use cases are to:
  1. 1.
    Launch and/or distribute ERC-20 tokens
  2. 2.
    Drop collections of ERC-721 NFTs represented by ERC-20 tokens

Key Features

  • Price discovery. The price of the token starts high and drops based on a pre-configured price decay curve that can be resisted by buying pressure from auction participants. Anyone can buy into or sell out of the auction freely at any time, so price truly regulates itself.
  • Open and permissionless participation. Freely launch tokens and participate in auctions. No whitelists, hard caps, or listing requirements. There is no minimum or maximum allocation. Auction participants choose how much they want to buy.
  • Fair distribution. TLAs flip the first-come-first-serve launch model on its head and change token launches from being a race where the first bot in or the transaction with the highest gas fee wins. Get your token into the hands of as many people as possible in a fair way that disincentivizes front-runners and whales getting better rates than smaller participants.
  • Capital efficiency. The initial price of the token being auctioned can be magnified by up to 99 times relative to the collateral deposited along with it. Additionally, the collateral can be fully retrieved at the end of the auction unless the auctioned tokens already exist outside of the TLA and someone decides to sell into the auction.

States of an Auction

A. Scheduled, but not yet started

Figure A. Price starts high and is configured to fall unless there is buying activity.

B. Early live auction with moderate buying activity

Figure B. Enough buying activity to shift the price decay curve up but not override it

C. Completed auction with early spike in buying activity followed by steady buying

Figure C. Buying too early comes with the risk of a steep price decline

D. Completed auction with significant buying activity

Figure D. High buying activity can counteract price decay configurations
The aKlima auction was set to start at around $100 and drop down in price to around $10. As you can see in Figure C the significant buying activity completely counteracted these price decay settings..
Please note that participating in a Token Launch Auction through Copper is a high-risk endeavor and that the value of the tokens that you've received in exchange for contributing to such an auction might go to 0. Copper is not liable for any losses incurred by using our platform.
Copper was built as a convenience tool to more easily view and track Ethereum network events emitted through Balancer Protocol's smart contracts, and in particular to more easily surface a particular subset of Balancer's Liquidity Bootstrapping Pools (LBPs) that qualify under our categorization of a Token Launch Auction. Because Ethereum is a permissionless network and Copper is merely a view into the network, the Alchemist community bears no responsibility for the quality of projects that are surfaced as Token Launch Auctions through Copper.

Last modified 2d ago