Lydian Docs

Simplified example

This type of launch event can seem complicated. That is why we have included a simplified example to explain some of the concepts of the dutch auction.
Any questions regarding this launch event can be posted to Twitter or Discord.


In our example, the auction has only 4 participants. Each participant wants to commit their USDA to get LDN in return.
Starting Price
Reserve Price
Token Supply
400 USDA
10,000 LDN
The auction starts and Participant 1 commits 20,000 USDA straight away. This means he is the first to affect the LDN token price. During the auction the token price will be determined with the following formula:
TokenPrice=TotalUSDACommittedTokenSupplyTokenPrice = \dfrac{TotalUSDACommitted}{TokenSupply}
The auction continues and after a period of time Participant 2 wants to commit his 150,000 USDA. Since the auction has been going for some time, the Auction Price has lowered to 350 USDA. Participant 2 has bumped the Token Price to 17 USDA, since there is now a total of 170,000 USDA committed in the auction.
In our example the 4th Participant commits $600,000, pushing the total USDA commited to 1,000,000 USDA and in turn pushing the total Token Price to 100 USDA. Since the auction had run for some time, the Auction Price had already dropped to that point.
If the Token Price equals the Auction Price, the auction ends, since all tokens have been sold at that point.
In other words, as long as the Token Price is lower than the Auction Price, the Auction Price will continue to drop until it meets the Token Price or until it meets the Reserve Price of 40 USDA.
Since all tokens in our example have now been reserved, the auction ends early. This sets the final LDN token price at 100 USDA. Since the auction ended at t2 (see graph below), the reserve price of 40 USDA becomes obsolete.
After the predetermined runtime of the auction of 4 days, all participants will be able to claim the respective, percentage of LDN at the price of 100 USDA compared to the equation of USDA they've committed vs. the total amount of USDA in the auction.
ClaimableLDN=CommittedUSDATotalCommittedUSDA.TokenSupplyClaimable LDN = \dfrac{CommittedUSDA}{TotalCommittedUSDA} . TokenSupply
— Participant 1 gets to claim 200 LDN for 20,000 USDA.
— Participant 2 gets to claim 1500 LDN for 150,000 USDA.
— Participant 3 gets to claim 2300 LDN for 230,000 USDA.
— Participant 4 gets to claim 6000 LDN for 600,000 USDA.