Fairer Token Offering

Our innovative Fair Token Offering model plays a vital role behind the scene.

The ERC-20 Token serves as the foundation for DeFi composability. New token issuance creates new assets and risks, so the fairness of token offerings is particularly important. We created a new mechanism called Fair Token Offering (FTO) to facilitate the token issuance (henceforth, it will be referred to as FTO).

This mechanism contains the following attributes:

• 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.

	Buy $A	Add/Hold $LP	Remove $LP & Sell $A
Buy $A	(3,3)	(1,3)	(-1,3)
Add/Hold $LP	(3,1)	(1,1)	(-1,1)
Remove $LP & Sell $A	(3,-1)	(1,-1)	(-3,-3)

• (3,3): Both parties buys, and both win. (Highest benefit)

• (3,1): One buy, and the other add LP; both gain benefits, but not the maximum.

• (3,-1): One buys, and the other sells; the buyer wins, and the seller loses.

• (1,1): Both parties add LP s, providing moderate benefits.

• (1,-1): One add LP, and the other sells; the LP adder gains some, and the seller loses.

• (-3,-3): Both parties sell, and both lose. (Lowest benefit)