Oiler’s Balancer LBP Event
Hello Oilers,
Things are moving. Something big is being drilled and we feel ready to showcase our work to the world.
We have spent the past months working on a product that will bring more hedging capacities to anyone trading in decentralised markets and we are proud to open up our Alpha on Ropsten to selected users while collecting feedback.
We want to highlight that we are not ready yet to launch our product but we all agreed upon going forward with our LBP so we could start onboarding a community of alpha testers.
We intend to release our mainnet once a complete audit has been realised and more user testing has been conducted. Nonetheless, you can already join our Discord servers and soon you will be able to try out the beta of the product on Ropsten!
As we’re moving closer and closer to mainnet, we believe it’s time to answer the long-awaited question: “Wen token?”
Thursday 6th May around 1PM UTC, our Liquidity Bootstrapping Event (LBP) will occur. Please find the LBP start block and the End block here.
As LBPs are still not widely spread in this market, we prepared our case for LBPs in order for users to understand the rationale behind this decision.
Oiler’s team thoroughly believe that Balancer’s team has done a tremendous job and that LBPs should be a standard when it comes to token launch.
For those unfamiliar with Balancer, we recommend reading into their documentation. The TL;DR is that Balancer is a self-balancing portfolio. Balancer is self-branded as a “protocol for programmable liquidity”.
Balancer initially was used as a way to create automated portfolio strategies with automatic portfolio rebalancing. Unlike other AMMs, Balancer enables its users to have more than two assets and weights outside of 50/50 as it uses a different formula. It also enables pool managers to change the weights of each asset in the pool and change their transaction fees.
When comparing LBPs to Initial Dex Offerings (IDOs), we highly recommend Martin Köppelmann’s post on the topic to understand best what IDOs are first.
IDOs are by design less efficient and human friendly than LBPs. One of the best ways to seed liquidity on Uniswap is what Banteg proposed, but we decided not to go with this solution because bots still have an advantage over humans.
IDOs, unlike LBPs, are not meant to be capital efficient and to prevent front-running and FOMO. Due to bonding curves also, the price discovery mechanism is not the fairest one.
We highly suggest reading this brilliant post written by Mike McDonald regarding LBPs as it goes deep into the topic.
To recap what Mike dives into, Liquidity Bootstrapping Pools were conceived with the following considerations:
- A team should be able to build liquidity without large amounts of upfront capital
- A team should be able to create a treasury to fit their desired risk profile and funding goals
- The distribution of tokens and liquidity provision should be decoupled from token price changes. In other words, differently from bonding curves, tokens should be distributed even if their unit price stays constant.
With this in mind, Balancer’s team proposed to the world LBPs. And we decided to use it, like other projects because we are convinced that this is the best way for us to go forward. We highly recommend reading into what Perp protocol wrote about LBPs, or why Hydra decided to go further with an LBP as well.
Jeremy Musighi’s article A new paradigm for token distribution is an in-depth look into the power of LBPs. We invite you to read the original article but here are the key takeaways:
LBPs achieved qualities sought after but rarely found in IDOs: “fair competition between humans and bots, minimized volatility, even token distribution among participants, and a healthy and stable price discovery process”.
Similarly to previous protocols launched using LBPs, we follow a similar rationale regarding LBPs:
- Bots and apes have no advantage over humans
- LBPs enable fairer price discovery than other mechanisms
- LBPs are permissionless and scalable
Bots and apes have no advantage over humans
IDOs lead to gas war as you are incentivised to be amongst the first buyers. In an LBP, as the price discovery mechanism is inverted, it is actually great advice not to ape into the LBP.
It is also important to highlight that our LBP will last for 48H which enables anyone to participate without having to wake up at strange hours. Trading is also restricted through imposed trading fees. In our case, a 1% trading fee prevents users to trade into the LBP and, therefore, impact the price.
We bring transparency to our LBP in order for users to understand the market, the tokenomics, the product and the demand behind the project.
LBPs enable fairer price discovery than other mechanisms
Apes shouldn’t ape into an LBP because of the reverse price mechanism inherently designed in an LBP. When building an LBP, if the demand does not kick in, the price will organically drop in a slow-paced manner. This enables a fair price to be reached before any FOMO kicks in. By enabling this, you protect buyers from themselves and make sure that the market has the ability to evaluate correctly the project.
LBPs are permissionless and scalable
When participating in an LBP, users are allowed to use any token they want thanks to Balancer’s smart order router. This enables virtually anyone to participate in the LBP with as little friction as possible.
What will our team do with the LBP proceeds?
The Oiler Token Liquidity Bootstrapping Event (the “LBP”) is a healthy token price discovery mechanism employed by Oiler. The LBP is not a token sale nor a token offering, and Oiler does not receive any proceeds from the LBP. Assets contributed to the LBP cannot be redeemed or withdrawn by Oiler. Upon completion of the LBP, the assets are technically routed to the Uniswap OIL-USDC pool, and will remain in the Uniswap pool indefinitely.
Now, let us talk about our LBP, and more especially all the data one needs before entering it.
Oiler’s team has built a Google Sheet to enable anyone to build potential scenarios regarding the token’s price evolution.
Oiler’s LBP will start with a token price of $0.75, which means a $75 million fully diluted valuation and has the capacity to go as low as the seed price of $0.07, a $7 million fully diluted valuation.
1.775% of the total supply of Oiler, or, 1,775,000 tokens will be added to the LBP.
What can you find in this said Google sheet?
In this Google Sheet, you can find pretty much everything relevant regarding our private sale, the LBP and the first month of trading.
We’re acting in the most transparent way to ensure that anyone can pursue their own scenarios prior to the LBP to know whether or not to ape. Though if you think about it, running scenarios is not what an ape does.
In this Gsheet, you can modify all the green cells. The yellow cells shall not be touched and the blue cells are constants.
In this Gsheet, you will be able to find the following sheets:
- Simulator
- Vesting Table
- Vesting Chart
Simulator
The initial sheet was built by Balancer’s team. We decided to improve it for the sake of potential LBP event participants and add as many parameters as possible.
The most important parameters for LBP event participants are the following:
- Demand: representing the total amount of tokens contributed to the LBP. We advise you to play with it to understand how the price will behave.
- SAFT TGE: The SAFT holders will be unlocked 5 days after the TGE, or to put it simply, 72h after the end of the LBP.
- SAFT Staking ratio: % of SAFT staked in the pool post-LBP.
- SAFT sellers: % of SAFT market sold post-LBP.
Vesting Table
This Gsheet enables you to understand the advantage of SAFT signers over the market. This also enables you to understand when the price will be volatile because of unlocks.
Vesting Chart
This Gsheet enables you to visualise properly the Allocation sheet.
A well-oiled machine has nothing to hide.
It’s slippery though, so be cautious.
You know the drill 🛢️
Legal Notice:
This article and any information contained in it is subject to the Legal Notice and Risk Disclosure Statement. Please carefully review the Legal Notice as it contains important legal information, risk disclosure statement, limitations and restrictions relating to the information that we provide, third-party resources and forward-looking statements.
The Oiler Token Liquidity Bootstrapping Event (the “LBP”) is a healthy token price discovery mechanism employed by Oiler. The LBP is not a token sale nor a token offering, and Oiler does not receive any proceeds from the LBP. Assets contributed to the LBP cannot be redeemed or withdrawn by Oiler. Upon completion of the LBP, the assets are technically routed to the Uniswap OIL-USDC pool, and will remain in the Uniswap pool indefinitely.
Links
Oiler’s Website: oiler.network
Oiler GitBook: https://docs.oiler.network/oiler-network/
Oiler’s Medium: https://medium.com/oiler-network
Oiler’s Twitter: https://twitter.com/OilerNetwork
Oiler’s Discord: https://discord.gg/bxMsvVTgJp
Oiler’s Telegram: https://t.me/oilernetwork
