Liquidity Bootstrapping Pool (LBP)
A token-launch mechanism using a pool with gradually shifting weights, starting at a high price that declines over time unless buying demand supports it.
A Liquidity Bootstrapping Pool is a specialized automated market maker pool used for token launches, configured to start with a high ratio of the new token's weight relative to the paired asset (such as a stablecoin), with that weighting automatically shifting over the sale's duration so the token's price drifts downward over time unless buyers actively support it. This design deliberately discourages buying heavily at the very start, since early buyers pay the inflated starting price.
LBPs are intended to produce a fairer and more gradual price-discovery process than a fixed-price sale or a standard constant-product pool launch (see Kaavon's "Fair Launch" glossary definition), reducing the advantage that bots and front-runners would otherwise have in sniping a token at its very first, often sharply mispriced, trading moment. The approach doesn't eliminate speculation or volatility, but it spreads buying pressure across the sale window rather than concentrating it entirely in the opening seconds.
Examples
- A project launching via an LBP might start the sale with a price far above its expected fair value, letting the declining weight curve pull the price down toward where real demand meets it.
- Because an LBP's price declines automatically absent buying pressure, bots attempting to snipe the token at the very first block gain little advantage compared to a fixed-price or constant-product launch.