APWine Balancer Liquidity Bootstrapping

APWine announced $APW governance token will be distributed through a liquidity bootstrapping event on Balancer, May 19 -May 21.

On Uniswap, liquidity pools are created with the same amount of tokens on both sides: the value of both assets in proportion must be equal. For instance, if you want to provide liquidity to an ETH/DAI pool at a price of $4,000 / ETH, you will need to provide liquidity in proportion — e.g. both 10 ETH and 40,000 DAI. This means both assets have the same “weight”, or proportion, in all the liquidity provided in the pool — essentially a 50 / 50 ratio.

Balancer, on the other hand, allows the creation of pools with arbitrary weights. This makes it possible to create pools with custom weight ratios. In a 80% / 20% ETH/DAI pool, for example, you could provide liquidity with 10 ETH and only 10,000 DAI. Since 80/20 = 4, this means you can supply 4 times as much ETH as DAI.

In practice, this mechanism comes in very handy to bootstrap liquidity for new tokens without an existing market. A Balancer Liquidity Bootstrapping Pool (LBP) is a pool whose weights gradually adjust from an initial ratio to a target ratio, during a pre-determined time period.

The LBP aims to distribute 7% of the supply, as per $APW Tokenomics.

A pool will be created with an initial 3’500’000 $APW and 800’000 USDC, at a 90 / 10 weight ratio. The weights of the pool will gradually adjust to reach the target of 40 / 60 at the end of the event.

In practice, this means the price of $APW will start at $2.05 and has the theoretical capability to go as low as $0.016 — half the seed price (if there are no buyers).

Only the APWine team will be able to supply liquidity to the pool, and no $APW tokens will be in circulation before the LBP — this event is the first public opportunity to acquire $APW.

Since the aim of the LBP is to distribute $APW in a fair way, there will be trading fees to prevent bots from profiting by buying and selling the tokens during the event.

What is Balancer?

What is APWine?

APWine is the protocol allowing you to trade unrealised yield. Speculate on the evolution of the yield generated by different DeFi protocols. Hedge your risk on your passive revenue, converting it into futures.

📰 INFO:

https://apwine.medium.com/apwine-balancer-liquidity-bootstrapping-event-tge-f04ea1d3855e