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18. Illuvium Balancer Liquidity Bootstrap Pool Starts Tuesday March 30th, 15:00 UTC

This post was originally published on illuvium

The Balancer Liquidity Bootstrapping Pool (BLBP) is quickly arriving, and the Illuvinati Council has approved IIP – 002 which sets the parameters for the pool. There will be a total of one million tokens inside the (BLBP). This is 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. But there are some important details you need to know, so please read carefully.

What is a Balancer Liquidity Bootstrapping Pool?

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.

Balancer has been able to solve this through variable weightings of assets. In a regular pool, two assets are matched in value 50:50. In a BLBP, this is different, and the weights change over time to create downward pressure.

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.

Illuvium/Balancer Swap Interface (pricing shown for display purpose only)

Steps to participate

  1. Go to swap.illuvium.io
  2. Connect a compatible wallet — MetaMask, WalletConnect, Coinbase Wallet, Trezor/Ledger (through Metamask)
  3. $ILV is paired with ETH. Swapping with other assets will result in greater transaction costs.
  4. Ensure your wallet has sufficient ETH for gas charges.
  5. Insert the amount of $ILV that you wish to purchase and select “SWAP”
  6. $ILV will be in your wallet when the transaction is complete.

For more information visit Balancer LBP FAQ.

Important Parameters

An IIP was created and submitted to the Illuvinati Council Tuesday, and then approved by the Council on Wednesday. As such the parameters for the sale are as follows:

Start Price: $50 USD

Starting weights: 96:4

End weights: 50:50

Duration: 72 hours

Token Supply: 1 million.

Token Contract Address: 0x767fe9edc9e0df98e07454847909b5e959d7ca0e

Token Symbol: ILV

Decimals of Precision: 18

Key Takeaways For The Sale

  • Do Your Own Research: Nothing in this document should be taken as financial advice. It only describes the mechanisms and parameters of the BLBP.
  • No FOMO: The declining price mechanism of the BLBP allows interested users to wait until they are comfortable with the price before acquiring tokens. No need to rush.
  • Bots aren’t incentivized: Front-running or sniping transactions doesn’t work due to the nature of the pool.
  • Price discovery: Similar to a Dutch auction, users will have a long time window to acquire tokens at a price they find attractive. Market forces will determine what the final valuation will be.
  • Use GAS wisely: As Balancer is on the Ethereum network, transactions are subject to GAS fees. To minimize potential GAS costs, reduce the number of transactions, as each one attracts a fee.
  • Slippage and failed transactions: There is a limit for the slippage of any transaction. Slower transactions (by selecting lower GAS) risk the price moving too far and failing to process, which wastes GAS.

The graph above shows the price of a token compared to the starting price (as a percentage) in a situation where no purchases are made. This is to illustrate the downwards pressure on the spot price.

The graph above shows the price of a token compared to the starting price (as a percentage) in a situation where random purchases are made throughout the sale. This is to illustrate how purchases bump the price.

NOTE: This does not represent the actual price or direction of the token during the sale and is used for illustrative purposes only.

Exclusive Illuvium BLBP NFTs

At the end of the bootstrap, the amount of ETH used for all purchases converts to points at a rate of one point per ETH. 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.

The full list of NFT’s redeemable in the BLP sale will be viewable in a follow up medium post prior to the BLP opening.

Quantstamp ERC-20 Security Audit

Audited March 22nd 2021, by Quantstamp with 0 high risk, 0 medium risk, and 4 low risks resolved.

Disclaimer: Illuvium is the first community governed AAA blockchain-based video game. $ILV is a digital asset with no associated rights at this time other than governance rights. Under Illuvium’s decentralized governance structure, members of the Illuvinati Council are elected by $ILV holders and will determine configuration and features that may result in holders of $ILV receiving NFTs, a portion of revenue generated in the game or other benefits. The nature of any such benefit is not yet determined and will be set by the Council from time to time. Any prior statements of potential benefits of holding $ILV are suggestive only and yet to be determined by the Illuminati Council. A person acquiring $ILV has no actual, contingent or prospective rights to any such benefits and accordingly should have no hope or expectation of any benefits being provided to them. If any benefits are provided at a later time, they are subject to change by the Council. Any person considering acquiring $ILV should consider seeking independent advice.

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