A dive into the SoundPools LBP
DISCLAIMER: SoundPools is currently in alpha and was originally modelled and developed by a one-person engineering team. While we are in the process of scaling, please consider risks associated with early stage developments. Furthermore, engaging in the LBP without necessary skills or experience could leading to a loss of funds.
What is and Why use a LBP?
LBP (Liquidity Bootstrapping Pool) is an adjustable Balancer smart contract that is used for initial distribution and price discovery of new assets. It uses a constant selling pressure and has a limited time duration, during which price continually drops if there is no demand.
Perp Protocol have done a great job summarizing why LBP is the optimal way to distribute stake in the network. To summarize:
- Fair for humans (bots don’t have an advantage over human participants)
- Better price discovery
- Anyone can do it (public and permissionless)
LBP Parameters
The Balancer LBP will last approximately for 3 days. At the present we plan to run it during the back half of May.
We will announce the contract address from our official telegram account.
The weights of the LBP will gradually change during the 3 day period, creating downward pressure on price:
SOUND:DAI = 97.5 : 2.5 to
SOUND:DAI = 37.5 : 62.5
Starting Price: $0.0157
Initial Token Supply: 50,000,000
How to participate
- We will post a link to the LBP on bot our website and our telegram the moment it commences.
- This will direct to the Balancer Exchange. Please make sure the Balancer address is the same as the contract address when proceeding.
3. From here you will net to connect wallet. For example, Metamask.
4. Then you will enter the amount of DAI you would like to swap.
5. Click the Swap button. Note that there will be two on-chain transactions, one to approve and another to swap might be required. Expect up to two confirmations.
6. Once the transaction is confirmed, SOUND will be immediately available in your wallet.
Side notes
Do not APE in at the beginning. LBPs are designed to see downward pressure on prices from smart contracts.
The default max slippage is 0.5%. Set it higher if you are buying a relatively larger quantity or split your order into multiple smaller orders.
Buying in a balancer pool costs gas, setting the gas fee too low may results in transaction failure.
The swap fee is set to a relatively high amount (0.9%) to deter front-running bots and arbitrageurs.
A Uniswap (SOUND-ETH) pool will be seeded after the end of the LBP. Please only use the contract addresses posted on website or telegram. Anything else should be considered a scam.
Unswapped tokens from the LBP will be reallocated to SoundPools treasury, which is owned by the community.
For a more in depth look at the project: https://docs.soundpools.org/
