Liquidity Bootstrapping Pools

One defining feature of constant mean AMMs is the ability to change the target weight for an asset over a specific period of time. This feature birthed Liquidity Boostrapping Pools (LBPs) which have since become one of Balancer’s most compelling use cases. LBPs allow for fair market access with low starting capital.

In a typical LBP, the pool balance starts with the new protocol token and a stablecoin in an 80:20 ratio. The example above shows Perpeptual Protocol launching $PERP on the first ever LBP. Over the course of the sale, the pool balance shifts to 20:80. This structure allows new projects to conduct public sales in a fair market on decentralized infrastructure without having to worry about frontrunning. Historically, it also allows for wider genesis token distribution.

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