A quick guide to Fair Launch
You may have heard of the term ‘Fair Launch’. You probably even use coins created according to this principle. We will try to explain, in simple words, what a Fair Launch is because Noah Project is going to be closely related to it.
What is a Fair Launch?
A Fair Launch is a way of distributing new tokens using objective criteria that guarantees equal access to distribution, e.g. no pre-mining or venture capital allocations. Instead, tokens are distributed in different and fair ways – through liquidity mining (as it was with yEarn) or exclusively to active users only, as Uniswap did. It may surprise you to learn that Bitcoin is another example of a Fair Launch. Mining is the only way to create new BTCs.
Fair Launch tokens provide better results in terms of price. They are more stable than ordinary tokens and have strong communities behind them.
What types of Fair Launches are there?
In recent years, the Fair Launch concept has proven its worth. Therefore, the crypto community has developed a variety of Fair Launches.
- Selling on decentralized platforms like DxSale.
- Retrospective Airdrops. Examples: Uniswap, 1inch, Ampleforth. 1inch went further still, by conducting an airdrop at the first stage and then a distribution to its liquidity providers.
- Liquidity bootstrapping (LBP). A sale format according to the Dutch auction system. The auction starts at the maximum price and decreases over time. If users don’t buy for a while, the price increases when the next purchase goes through.
- A regular Dutch auction. Each participant determines the amount and number of tokens they want to buy. After accepting applications, the distribution begins, starting with the highest price for a token until they all run out.
- The over-subscription format. Users add more funds, higher than the hard cap. Then the participant’s contribution is determined by their share of the total funds. This is the percentage they receive from all the tokens on sale. The rest of the funds will be returned.
- Farming reward. Avalaunch launched their token in the form of farming rewards and nothing else. To receive project tokens as a reward, you must stake other assets.
- Bonding curve distribution. Distribution according to the rising Bonding curve while the market is open for trading. Each token sold next is more expensive than the previous one and the sold one is cheaper.
Why is a Fair Launch good for users?
A Fair Launch is the best way to allocate new tokens to users. They go through most evenly. You don’t have to be a whale or an investment fund to participate in allocations. Decentralization is another plus of Fair Launch. The possibility of intervention by third parties is reduced to a minimum.
Next time, we will tell you more about how to run a Fair Launch – see you soon!
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