3. Launchbowl - Initiatives Rundown
Liquidity is key in DeFi in order to enable a positive trading experience. The more liquid a pool, the less slippage/price impact there is (the difference between market price and the price users are going to get). Thus, for both projects and the Minswap DEX, it’s important to have a liquid pool, as this means tokens can be traded without incurring high costs, resulting in a better UX.
The Minswap Launch Bowl aims to facilitate other protocols with ways to increase their liquidity on Minswap and their POL, bringing the entire Cardano ecosystem forward. It encompasses Initiatives:
The Classical Listing is a method recommended for projects which have a significant treasury, which they can utilize to seed their own token Pair. In this approach, the Project sets aside a % of their total supply (e.g 0.5%-5%) to be provided in the Liquidity Pool, and pairs it with the equivalent ADA from their treasury in order to grow the liquidity of the pool to a substantial amount where the trading experience is positive (we recommend more than 50k ADA TVL).
However, in many cases, the Classical Listing will not grow a pool to a sufficient amount to have optimal liquidity. For this purpose, there are 3 Farming Options for Projects can opt for. Please read ead more on those in the Subsection below.
The LBE as a Service is designed for projects which want to launch a token when it is not yet into circulation. The project sets a % of their total token supply aside (for instance, 2% of total token supply), and LBEaaS participants have a fixed time period (e.g. 10 days) during which they can supply ADA. After that period, the ADA from Participants and the tokens from the project get put together, and the initial Liquidity Pool is created.
Participants obtain 50% of the resulting Liquidity Pool (in form of LP Tokens of ADA and the project’s token), as well as an NFT (which might act as a booster) for participating. Essentially, by supplying ADA in this event, participants will effectively swap half of the ADA they supply for the project’s token, at the price which is fairly discovered at the end. Participants benefit by having the chance to obtain the project’s token in bulk for the first time, as well as a potential farming boost from the NFT, in a way that is congestion-friendly and not subject to front-running.
The Project which uses the LBEaaS remains with the other 50% of the resulting Liquidity Pool, which de facto becomes POL. With this method, the price in respect to ADA of the project’s token is decided by the market (in how much ADA gets supplied) and the project does not need to have a significant treasury to bootstrap their pool, as the liquidity is crowdsourced.
The Collective Zap-in is a new method that we are excited to be pioneering. Succinctly put, it could be said the Collective Zap-in is the LBEaaS, but for projects that already have a Liquidity Pool on Minswap.
Participants deposit ADA and ADA-Cost-Average (ACA) the Liquidity Provision into the Project Token/ADA Pool that is trading. In essence, participants are given a time period (e.g. 2 weeks) to supply ADA to the Collective Zap-in event, and every set amount of hours, the ADA that was supplied gets paired with some of the project’s tokens that were set aside, and provided to the existing Liquidity Pool.
Participants obtain their LP Tokens at the end of the event according to the amount of ADA they supplied, and everyone will receive the LP Tokens at the same price, regardless of when they provided the ADA. When you provide ADA in the event, you are swapping half of it for the project’s Token at the price established at the end, when the LP Tokens are distributed. Hence the name “Collective Zap-in’’ ⚡. As an incentive to partake, CZI participants also obtain an NFT, which would act as a booster on the Double Farm that follows up after the event.
The Project which uses the CZI remains with the other 50% of the resulting Liquidity Pool, which de facto becomes POL. The price in respect to ADA of the project’s token is decided by the market dynamically while the token is being traded. Similarly to the LBEaaS, the project does not need to have a significant treasury to conduct it, as the liquidity is crowdsourced. Disclaimer: currently LBE as a Service (LBEaaS) and Collective Zap-in (CZI) are initiatives reserved to projects which are in an advanced staged and have already shipped/existed for a long time and are recognised within the community. Examples of such projects are: Clay Nation, Liqwid Finance, Indigo or Mocossi.