What is a Liquidity Bootstrapping Event

What is a Liquidity Bootstrapping Event?

A Liquidity Bootstrapping Event (LBE) is a fair launch mechanism used on Minswap to:

• Distribute a new token to the public

• Bootstrap liquidity for a trading pair

• Set an initial market-driven price

• Prevent front-running and whale dominance

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How It Works

No Starting Price

Unlike fixed-price launches, the token starts with zero liquidity and no set price.

Dual Token Pool

• The team or project provides the new token (e.g., $XYZ).

• Participants contribute ADA during the LBE window.

Price Discovery Phase

• As more ADA is added, the price of the new token dynamically increases.

• Larger contributors must pay more per token, incentivising early participation and wider distribution.

Token Allocation

• At the end of the event, ADA and the new token form a trading pair pool on Minswap.

• Participants get LP tokens representing their share.

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Benefits of Minswap’s LBE Model

Fair and Transparent Distribution

• Prevents sniping and early insider access

Community-Led Price Discovery

• Token price is based on supply/demand during the event

Instant Liquidity Post-LBE

• Tokens are tradable immediately with deep initial liquidity

Decentralised and Permissionless

• Anyone can participate using a Cardano wallet

Integration with Yield Farming

After an LBE, the LP tokens can often be:

• Staked in farms to earn MIN rewards

• Used in other DeFi strategies within the Cardano ecosystem