A Hot project announces its listing at 20:00. The price increases sharply right after that. 5 minutes later, you FOMO and buy at the peak price. And just 5 minutes later, price divided by 5 times. You lose heavily. The main culprit is Sniping Bots. They are programmed to buy right in the same block when liquidity is just added, pushing the price sky high, and immediately dump it on slow users like you. Liquidity Bootstrapping Pool(LBP) completely reverses this game with its Reverse Auction mechanism.
๐ธ LBP allows asset weights to change over time.
The Start the project sets an extreme ratio ๐ The token price starts EXTREMELY HIGH.
Over 3 days (72 hours), the Smart Contract automatically adjusts the ratio gradually towards equilibrium (50% Token, 50% USDC). ๐ Constant technical sell pressure creates a downward curve. If no one buys, the price AUTOMATICALLY DROPS.
The End the pool closes, liquidity is withdrawn
๐ธ Why Liquidity Bootstrapping Pools Can Fight Sniping Bots:
If a Bot buys at second 1 (price $10), the very next second the weight shift drags the price to $9.9. The Bot loses money instantly. No Arbitrage opportunity exists.
LBP forces buyers to wait. You watch the price decay from $10. You ask What is the fair price?
If you think $5 is cheap, You buy
If the market thinks $5 is still expensive, No one buys, Price continues to drop to $2.
๐ The market discovers the fair price (Price Discovery) without manipulation by whales or Bots.
๐น LBP is known as a Fair Launch. When participating in an LBP, the golden rule is Never FOMO buy early. Wait for the chart to curve down and flatten out; that is when the true value is established.
Would you rather buy a token at a fair market price, or continue racing against light speed Bots on Uniswap?
News is for reference, not investment advice. Please read carefully before making a decision.
