KLAP Liquidity Drop Preview

Overview

As we inch closer to the launch of the KLAP token, we are delighted to announce the liquidity drop as the final pre-launch early incentives campaign.

As you may know, 30M KLAP tokens have been allocated to Lockdrop rewards, while 15M KLAP tokens have been allocated to pre-mining rewards. The remaining 5M KLAP tokens in the Early Incentives tranche (https://docs.klap.finance/klap-token/tokenomics) will be going to the Liquidity Drop event.

The Liquidity Drop allows community members to participate in seeding the KLAP/KLAY liquidity pool at launch.

The protocol will also deploy $500K worth of KLAP/KLAY liquidity (separate from the liquidity drop) over time.

How does the Liquidity Drop work?

In order to participate, you must have KLAY tokens ready in your wallet. There is no minimum to the amount of KLAY you can participate with.

The Liquidity Drop will officially open on July 16th at 10:00am KST, and close immediately once deposits reach the 3M KLAY cap or if the event expires on July 20th, 10:00am KST.

Initial Price of KLAP

The launch price of KLAP is determined by how much KLAY is deposited in the liquidity drop.

If 3M KLAY is deposited, the initial price of KLAP would be (3M KLAY / 5M KLAP) * 0.25 = $0.15 (assuming 1 KLAY = $0.25).

If just 1M KLAY is deposited, the initial price of KLAP would be $0.05.

What do participants get?

By depositing KLAY, participants will receive free KLAP, worth 100% of the amount of KLAY they deposited at launch.

For example, if 1M KLAY is deposited, the 5M KLAP will be paired with the 1M KLAY to seed the liquidity pool, at an approximate price of $0.05.

After 3 months, participants will receive the KLAP-KLAY LP tokens pro rata.

LP tokens will be eligible for Pool 2 rewards (KLAP-KLAY liquidity mining rewards) during these 3 months.

Given that the user gets the LP tokens back after 3 months, they would be getting an APR of 400% plus the Pool 2 rewards they earn over the 3 months if KLAP remained at launch price of $0.05.

Note that the realized value of the LP tokens depends on the price of KLAP, which can fluctuate. Final returns and APR depend on total KLAY deposited, how much KLAY you deposited, the price of KLAP at the time of withdrawal, KLAY price, as well as Pool 2 APR.

Liquidity Drop Calculator

In order to help you estimate the rewards you could get from participating yourself, here is a template Liquidity Drop Calculator that you can play around with. Feel free to make a copy and modify yellow highlighted values based on your predictions:

https://docs.google.com/spreadsheets/d/1XRQ9VBnmXTenkHnthZBWPmPU8L-yjUrSxFqYNZcPqPc/edit?usp=sharing