Klima DAO Fair Launch: (Pt 2) Liquidity Bootstrapping Pool

Our successful Initial Discord Offering (IDO) was designed to distribute KLIMA tokens across our early Discord community, and we saw over 500 Klimates take part

We will now begin implementing Part 2 of the Fair Launch Strategy by deploying a Liquidity Bootstrapping Pool (LBP) to distribute aKLIMA tokens as widely as possible.

aKLIMA is a coupon that will entitle holders to exchange 1:1 for KLIMA upon the full launch of the protocol.

There are three key objectives for the LBP:

  1. To cost-effectively distribute a supply of KLIMA into the hands of as many people as possible.
  2. Achieve sufficient liquidity to bootstrap our Sushi pools at full launch of the protocol.
  3. Enable the market to achieve a “fair price” of KLIMA.

We will be launching the LBP in partnership with Copper — take a look around on their website and through their docs, and follow @CopperLaunch on Twitter for updates.

What is an LBP?

A Balancer Liquidity Bootstrapping Pool is an adjustable balancer smart contract designed to distribute tokens fairly across market participants. LBPs use constant selling pressure and have a limited time duration, during which price continually drops when there is no demand.

By using an LBP, Klima DAO can define parameters (such as pool weights and total available supply) and allow the market to converge on a fair price for the token as demand emerges.

Critically, LBP’s have a number of key characteristics that make them ideal for the launch of a DeFi product and will enable Klima DAO to achieve the above objectives:

  1. They are a capital efficient means to initiate a pool, and remove the need to pay costly fees to market makers or exchange listings.
  2. The high initial price and downward price pressure give humans a fair chance to participate and precludes exploitation by arbitrage bots; whales are incentivised to split their trades into smaller tranches over a period of time.
  3. They are open and permissionless — anyone that has a crypto wallet can participate.

To learn more about LBPs, we recommend reviewing this introduction from Balancer, or diving into the extensive documentation provided by Copper on Fair Launch Auctions.

Please note that this is not a token sale. This is a liquidity bootstrapping event. Proceeds from the LBP will be used to provide liquidity for the DAI/BCT and BCT/KLIMA pools.

Why is Klima DAO taking this approach?

Today, the initial supply of some tokens are being distributed primarily to private investors and founders. This is sub-optimal and undermines the very nature of decentralisation. For Klima DAO, the core value in the initial distribution of KLIMA tokens is fairness; we believe our IDO and LBP are the best tools we have to deliver on this.

In the IDO we had tight control over distribution, with NFTs (representing a claim on future KLIMA allocation) sent only to alphaKlimates who signed up to our Discord whitelist. As we approach full launch and interest in the protocol continues to increase, the LBP is the primary tool we will use to ensure that supply is distributed across all those who wish to be involved at this stage. At launch, KLIMA will become available on the free market and we will have no control over token distribution.

Ultimately, the purpose of the Klima DAO protocol is to create and capture value through network activity within the Ecosystem; a wide and fair distribution of tokens is in the interest of both the community and the protocol. By using an LBP, we can guard against technical exploitation, cartelisation and free-ridership at this early stage, and distribute tokens at a fair price to community members who are invested in the long-term success of the project.

Next Steps

Our LBP will start on Tuesday 14th September 2021 at about 4pm GMT, expecting to conclude after 3 days on Friday 17th September 2021.

In the LBP, market participants will have the opportunity to receive an allocation of aKLIMA.

The contract address will be announced on Twitter from the Klima DAO account: https://twitter.com/KlimaDAO.

Any other pools or announcements should be considered as a scam.

Please make sure the Copper address (which will be available at: copperlaunch.com/auctions/{poolAddress}) is the same as the contract address before proceeding.

In the coming days we will release an explanation on how the LBP price discovery works and all other documentation that will ease the user in the process of participating, and what will happen post-LBP in the run up to full launch.

Disclaimer

The information provided in this Medium Post pertaining to Klima DAO (“Klima DAO”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this Medium Post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This Medium Post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. Klima DAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and Klima DAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. Klima DAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this Medium Post supersedes any prior Medium Post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither Klima DAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this Medium Post by you or any of your representatives or for omissions from the information in this Medium Post. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this Medium Post.

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