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In an effort to ensure all earliest followers of Lydian get a premium experience, the DAO will organize a fair and transparant launch. The journey will kick off with the special two-day Treasury Bootstrapping Event (TBE). The TBE will be in the format of a Dutch Auction.
The LDN treasury bootstrapping event (TBE) will be held on the Lydian website on March 15 2022 (starting time 15:00 CET) and will come to a close either after 4 days or when all tokens have been sold, whichever will happen first. When the auction closes, the tokens from this event will be claimable.
A dutch auction will allow anyone to place a bid/commit on a portion of the initial token supply. The auction will end either when the total initial token supply has been committed, or after the predetermined auction runtime of 4 days.
In this auction, the price per token is set arbitrarily, slightly higher than the initially expected value. This will dissuade the usage of bots and interest of whales that would scoop up large portions of the initial token supply, resulting in future risks for Lydian.
The price per token will decline from the initial value as the auction time passes. Every commit action that takes place will result in a small bump in price per token.
This mechanism allows for a fair initial price discovery by the community. Participants will individually choose at which token price point and how many tokens they are willing to buy and commit their funds. However, the final price per token will be determined at the end of the auction. This means that all participants who have committed their funds will pay the exact same price per token. In other words, although you might have committed at a certain price point, all auction contributors will get the same minimally agreed price.
The end of the auction occurs once all tokens are committed for purchase or after the predetermined auction runtime of 96 hours. Shortly after the auction concludes, the tokens will be claimable by those who have committed for a portion of the supply.
This is the first opportunity for the general public to mint LDN and to participate in the governance of the network. All proceeds will go to the Lydian Treasury, a smart contract entirely controlled by LDN token holders.
We acknowledge the risks of this type of TBE compared to a more common initial bonding sale free-for-all. To elaborate; the chances of a token overvaluation during launch are limited, thus resulting in a more modest (and realistic) treasury. This is caused by:
- 1.bots and whales that are dissuaded from scooping up a large portion of the initial supply;
- 2.a longer period of time to buy, allowing more people to participate and generating less fear of missing out;
- 3.all tokens are sold and thus valuated at the lowest agreed price during the auction, causing a fair price discovery.
Nevertheless, we also acknowledge the major benefits for our community and protocol longevity, such as:
- 1.fair price discovery, equal for all participants,
- 2.no first come, first serve, there will be plenty of time to participate in the event and join the guild,
- 3.a greater distribution of tokens. More members means more stability and robustness for Lydian.
We have great respect for the Stacks community and DeFi enthusiasts in general. At Lydian, we are therefore committed to continue placing the interests of the community first. We believe this is the only way to ensure a long and healthy future for any project in the Crypto space.
In that same vein; there will be no whitelist or privileged entries for the Bootstrapping Event. Anyone with USDA (Arkadiko) can take part in the dutch auction and use it to mint LDN. Please make note that in order to mint LDN during the auction, some STX will be needed to cover the transaction’s gas fees.
Following the 4-day period of this kick-off event, we will seed liquidity for the LDN token using 3.75% of USDA raised in the treasury together with 385 LDN.
Staking for LDN will be added after TBE but before bonding. Our plan is to list a LDN-USDA pair on Arkadiko Swap pending governance approval. After the creation of the pool, participants of the dutch auction will be able to add liquidity and prepare themselves for the first bonding event which will take LDN-USDA LP as its bonding asset. This will create protocol owned liquidity for LDN-USDA, which is important for Lydian to incentivise.
- 1.Treasury Bootstrapping Event: Predetermined parameter launch focused on bootstrapping the treasury with USDA.
- 2.LDN Staking Launch: Earn yield through rebases.
- 3.wLDN-USDA Bonding Programme: Additional LDN tokens are created by the bonding mechanism which enables the protocol to own LDN-USDA LP tokens.