Fair Token Offering (FTO)
Our innovative Fair Token Offering model plays a vital role behind the scene.
Last updated
Our innovative Fair Token Offering model plays a vital role behind the scene.
Last updated
We designed a new liquidity entrance model, called Fair Token Offering (FTO) model, which is used exclusively by Dreampad and created by Honeypot Finance.
Uniform pricing across all users, so no rat positions.
Immediate establishment of a 100% deep liquidity pool for the token, enabling instant user trading.
No pre-minted token in the market;
All token A (launch token) is within the pool, preventing market manipulation such as early investor dumps.
Users who missed the token sale can only purchase it in the AMM pool, with no other opaque operations.
Removing liquidity is in balanced proportions according to constant K and thus will not affect the price;
Project parties can remove $LP tokens and obtain funding support for development without dumping the token price;
(Optional) Burn the token $A after removing liquidity,
This shows that the project owner has no intention of dumping the market;
As the price of token $A increases, the project can secure more funds by removing liquidity, which keeps the interests of the project side and currency holders consistent.
This model aligns with the (3,3) game theory proposed by OlympusDAO After raising funds through FTO, the behavior of the community and project owner can be categorized into three actions:
Buy $A;
Add/hold liquidity;
Remove liquidity and sell $A.
Each transaction to buy $A increases the extractable value $B of $LP; adding and holding liquidity provides the community with better prices and less slippage.
According to the constant k formula, removing liquidity is non-disruptive when executed without affecting the price; However, further selling would result in collective losses for all LP holders, as it would decrease the extractable value $B and reduce the token price. To counteract this, we have implemented a remove & burn tokenA mechanism to prevent price drops.
Let's see all FTO advantages.
The Fisher Equation, MV=PT, is a fundamental component of the Quantity Theory of Money, where M represents Money Supply, V is the Velocity of Circulation, P denotes Price Level, and T stands for Transactions. Traditionally, this equation has been used to monitor inflation and deflation. In the context of blockchain, however, P should be interpreted as asset value. The formula remains relevant, with MV capturing macro-level activities and PT reflecting micro-level dynamics.
Proof of Liquidity (PoL) incentivizes on-chain activity, accelerating the velocity of circulation. This enables PoL networks to achieve economies of scale with a lower token supply or even greater efficiencies with the same token supply. This contrasts with Proof of Stake (PoS) systems, where a significant portion of the token supply is locked by validators to earn rewards, resulting in a reduced velocity of circulation.
Fair Token Offerings (FTO) can further enhance the velocity of circulation by providing immediate liquidity after a token launch. This immediate available liquidity facilitates trading, significantly bolstering the Proof of Liquidity's capacity to achieve economies of scale.
