# Token Launches

The Liquidity Bootstrapping Pool (LBP) is the standard primitive for initial token distribution. The LBP utilizes time-dependent weights to facilitate fair price discovery and capital efficiency.

# Mental Model

You can think of the starting price of your LBP as the ceiling you would want to set for the token sale. This may seem counterintuitive, but since LBPs 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 are trying to sell the token above what it is worth. Setting a high starting price allows the changing pool weights of your LBP to make their full impact, lowering the price progressively until market equilibrium is reached. Unlike older token sale models, such as bonding curves, users are disincentivized to buy early and instead benefit from waiting for the price to decrease until it reaches a level they believe is fair.

# Advantages

# Capital Efficiency

LBPs can be configured as seedless, meaning they require no initial liquidity in the reserve token.

# Fair Market Price

LBPs often start with intentionally high prices. This strongly disincentivizes whales and bots from snatching up much of the pool liquidity at the get-go. When LBPs are used for early-stage tokens, this can help increase how widespread the token distribution is.

# Immediate Liquidity

Once the LBP concludes, immediate access to the funds raised is available. The new token holders can immediately trade their token, providing instant liquidity without lengthy lock-up periods.

# Sell Pressure

During a weight shift, the token price of one token experiences sell pressure while the other experiences buy pressure. When this is mixed with modest swap volume, the price approaches the generally agreed-upon market price.

# Configuration

Token launches using LBPs rely on a scheduled weight shift.

# Duration

Token launches are typically run over days (not weeks or months). A common choice is 48 to 72 hours (2 to 3 days), which gives participants time to enter without concentrating all activity into a short window.

# Weights

To create the necessary "price ceiling," the project token should start with a dominant weight and decrease over time. In practice, avoid weight schedules that go all the way to the extremes (close to 100/0 or 0/100), as pricing becomes highly non-linear near the ends of the range.

# Liquidity Migration

A successful LBP concludes with the project token widely distributed and the reserve token accumulated in the pool. To transition to a permanent trading venue, use the createWithMigration function on the factory.

This allows the migration of liquidity from the LBP to a concentrated or weighted pool upon conclusion.