Starbank Academy— Liquidity Bootstrapping Pools

Starbank
2 min readApr 28, 2022

Starbank Finance, which is based on Balancer V2, is releasing several types of pools. These pools consist of:

· Weighted Pools

· Stable Pools

· Meta Stable Pools

· Liquidity Bootstrapping Pools

Each of these pools employs a different strategy which means it’s important for the investor to understand exactly what they’re getting into. We will be covering each one of these pools to explain how they work.

What is a liquidity bootstrapping pool?

A liquidity bootstrapping pool is a type of weighted pool that can be used by projects to launch a token. What makes them different than other weighted pools are the mechanisms inside of them. LBP are a safe way for a project to launch their own token since they help remove any botting or manipulation during the token launch.

Perks of a liquidity bootstrapping pool

Set start and end weights

One perk of a liquidity bootstrapping pool is the ability that the team has to configure the weights of the LBP on launch and how the weights change over time. For example, a project could start the LBP with weights of 90–10. At the end of the LBP, the weights could be 75–25. This has many benefits, but it is ultimately up to the team to decide.

Anti-whale and anti-bot

Another perk of a liquidity bootstrapping pool is how the launch happens. In a traditional fair launch, the best time to buy in is the second the token goes live. This allows the price to get pushed up past your entry price as more and more buys keep coming in. This can be good for an investor but bad for the token if the price takes a nosedive after all the early whales start exiting. LBP help prevent this by their start and end weights. This is because as the weight for the newly launched token goes towards its ending weight, the price should either maintain or fall slightly. This creates a more even ground for everyone to enter without the fear of buying in too late. Typically, this window is 24 hours.

Participation

One final perk of an LBP is that anyone can participate. Unlike some tokens that require a whitelist, anyone that would like to invest in a token can do so in an LBP. The same thing goes for sells. Anyone can sell at any point if they are participating in an LBP.

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