How Do LBPs Work?

How Do LBPs Work?

LBPs start with a high token price, which is set intentionally to discourage early, large purchases and prevent whales from dominating the sale. The token price gradually decreases over a set period. This encourages participants to wait for a price they consider fair, helping to determine the token's market value through natural demand.

The price of the token is influenced by both time and the amount of liquidity in the pool. When more participants buy tokens, the price stabilise or even increases, reflecting true demand.

This mechanism ensures that the final price is a result of actual market demand, allowing a wider range of participants to join the sale at a price they deem reasonable. By preventing early buyers from scooping up tokens at low prices, LBPs promote more equitable token distribution, which is essential for building a strong and decentralised community.

LBPs are designed to ensure that token sales are fair, transparent, and accessible, leading to better outcomes for both projects and investors.