IIP-2

IMPLEMENTED

Simple Summary

Creates Illuvium's Balancer Liquidity Bootstrapping Pool to be launched on March 30.

Abstract

A Balancer Liquidity Bootstrapping Pool is designed to allow DeFi protocols to acquire capital from a smaller amount of liquidity than would usually be required when seeding a pool such as Uniswap or Sushiswap. The IIP proposes to create Illuvium's pool and launch the IDO on March 30.

Specification

• Starting weights: 96:4
• End weights: 50:50
• Pair: ETH/ILV
• Starting Price: $100 (in ETH)
• Duration: 72 hours
• Token Supply: 1 million
• Token Contract Address: 0x767fe9edc9e0df98e07454847909b5e959d7ca0e
• Token Symbol: ILV
• Decimals of Precision: 18

Overview

Utilizing Balancer for our Launchpad we are able to fairly distribute 1,000,000 tokens subject to no lockup that will enable a healthy and stable price discovery process. In a BLBP the weights change over time to create downward pressure, so when the pool goes live, the price will begin to decline, which is why the initial price of the token is set to a high value.

There are two competing forces for the price of the token in a BLBP. The changing of the weights of the tokens will naturally push the price of the token down, since the weights start out with the token being worth the majority of the pool’s value, and end up at a much lower level. The other force is trading of the token. As people purchase the token, the number of tokens in the pool decreases, but the value of those tokens must still match the weights, so the price of the token increases to compensate.

What you will see is a gradual drop in token price, matched by periodic ‘bumps’ where the token goes back up. In theory, the price should eventually find some value that the overall market finds to be an accurate value for the token.

At the end of the IDO, the US dollar value of all purchases converts to points at a rate of one point per USD. These points can be used to redeem promo NFTs that will only be available for a short period of time following the sale. This applies only to those who hold all of their ILV purchases after the sale concludes until the NFTs redeem window is closed.

Rationale

This will be the public’s first chance to acquire ILV outside of the two Discord Airdrops. Balancer was chosen because it is the fairest way to distribute the tokens, which has been proven with many projects. Other options would be to use 50/50 AMMs like Uniswap and Sushiswap, which would require more liquidity to be added, and are not as suited for decentralized initial offerings as Balancer Smart Pools.

Test Cases

N/A

Copyright

Copyright and related rights waived via CC0.