Mar 27, 2021
Tiered IBCO Update
By Dereek69, Shalaquiana and Munair
A tiered initial bonding curve offering (“Tiered IBCO”) is an innovation in distributing tokens to the public via smart contracts. Each tier is configurable and allows the publisher the ability to respond to various token demand scenarios without having to mathematically define a curve.
Shalaquiana’s initial BIOP offering design has been reconfigured to minimize avoid a strong price drop in case contributions slow in the days following the initial offering.
How exactly does this novel approach programmatically provide this assurance? Let’s dig into the updates to the initial offering of the BIOP V4 governance token in this article.
If you are new to the BIOPset Publication, you’ll want to read this first. Also, for those new to binary options, get a basic understanding of binary options trading on BIOPset here.
A couple weeks ago, Shalaquiana wrote a post urging the BIOPset community to vote for an initial tiered coin offering (“ITCO”). In this design, each tier held the same amount of BIOP tokens. [1]
The new tiered IBCO will aggregate BIOP tokens in tiers as previously outlined and run for one (1) week. However, the difference in BIOP price between the first and last tiers decreases, and the amount of BIOP in each tier gradually increases to match demand:
Motivation
BIOP is a governance token. Offering the token to the public should be straightforward, but it’s not.
Just moments before requesting an audit for the original BIOP tiered bonding curve smart contract, a thoughtful member of the BIOPset Discord remarked that any BIOP speculator looking for a quick 3X would buy BIOP on the first day of the offering and dump it on Uniswap as soon as the token listed. This is not desired behavior.
Mitigation
Dumping tokens for a quick 3X (or more) gain is a game speculators love to play. There are countless examples of degenerates (“degens”) dumping their bags on a community as soon as they feel they’ve profited sufficiently.
This kind of speculation is harmful to participants of the initial offering that are planing on holding BIOP for the long term.
“True believers” purchase the governance token hoping they can take part in meaningful initiatives of the fledgling decentralized autonomous organization (“DAO”), but they don’t necessarily want their tokens declining in monetary value.
Traditionally, primary token offerings vest to mitigate these pernicious effects. However, token launch and token lockup are antithetical.
The solution, therefore, is to gradually offer more tokens with each tier.
Price Per Tier
The price of BIOP increases by 0.00001 ETH per tier. This is a very modest price increase that should disincentivize rabid speculation and token dumping.
The price of the token should appreciate if the demand to participate in the DAO increases. Consequently, the price of BIOP tokens starts at 0.00008 ETH but must increase with each tier to maximize the fundraise without overly incentivizing price speculation.
Fundraising Goals
The tiered IBCO is a fundraiser. Make no mistake. The proceeds of the token sale will finance the liquidity pool and support other basic expenses:
- The first 50 ETH raised will cover smart contract audits, deployment, and marketing.
- The next 150 ETH (or 50% of the remaining amount raised — whichever is less) will be locked into the Uniswap liquidity pool at a starting price of 0.00015 ETH per BIOP. [2]
- The remaining funds will be added to the BIOPset liquidity pool for on-demand decentralized binary options.
Of course, the design of the tiered IBCO rests on the assumption that the BIOPset community eagerly awaits the governance token launch and is committed to holding it for its voting power.
Will It Work?
Stay tuned to find out! Join the discussion or learn more about BIOP here:
Website: https://biopset.com/
Twitter: https://twitter.com/biopset
Discord: https://discord.com/invite/4SRYBNdE3r
Telegram: https://t.me/BIOPset
Documentation: https://docs.biopset.com/
Please remember trading binary options is risky. That’s why financial derivatives are heavily regulated in certain jurisdictions.
This article is educational. Nothing in this article is financial advice. Always do your research.
[1] After private group discussions in Discord, the design team decided to retire the phrase ITCO in favor of Tiered IBCO. It was mostly a marketing decision because IBCO is a commonly used term in the cryptocurrency community. The ITCO term might confuse the market.
[2] 0.00015 ETH is ~26 cents presently. This would give BIOP a circulating market capitalization of ~$1.62MM at launch.
