LBP Participation Guide and LBP Protocol Token Potential
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LBP Participation Guide and LBP Protocol Token Potential
The advantage of LBP lies in fairness, but it requires users to have a certain level of awareness.
Navigating Web3 tides with focused insightsAuthor: Sleeping Wildly in the Rain
Fjord Foundry's native token $FJO LBP concluded successfully on the 19th. The final price of $FJO LBP was 1.91U, raising a total of 15.35M. Currently, $FJO is trading around 2.79U.
I’ll hop on this bandwagon to share my thoughts on the potential of Fjord Foundry’s token and my views on LBP (and briefly touch upon another LBP protocol).
Let’s dive in ⬇️
1. What is LBP?
LBP stands for Liquidity Bootstrapping Pool, a mechanism similar to a Dutch auction. Fjord Foundry is an LBP platform.
Simply put, before launching an LBP, the project team decides two things: 1) the number of tokens to issue; 2) the ratio of tokens to another asset (usually ETH or a stablecoin) in the liquidity pool, such as 99% tokens and 1% stablecoin.
Once the LBP starts, due to its dynamic pricing model, the price continuously drops (as token supply increases). When it reaches a user’s target price, they can buy in. If the price rises later (e.g., at certain points when more users buy, demand > supply), users can also sell.
After completion, projects typically use part of the proceeds from token sales to create liquidity pools on DEXs.
2. Advantages and Uncertainties
For users, the advantage of LBP lies in fairness. Without whitelists or "scientists," users can purchase tokens at their desired price point.
For project teams, LBP offers low-barrier access to initial funding, which can then be used to bootstrap liquidity.
So what are the uncertainties?
First, I believe participating in LBP requires a certain level of user awareness. Users must conduct thorough research before participating so they can buy tokens within a reasonable price range. Without proper research, users can easily lose money during an LBP.
The 1intro LBP serves as a good example. Due to lack of understanding about both the 1intro protocol and the LBP model, many users bought 1intro tokens right at the beginning of the LBP (I recall the opening valuation was around $1 billion), resulting in losses.
Second, protocols may release positive news during the LBP period to boost token sales—for instance, offering additional rewards to users who buy and hold tokens without selling. Therefore, users should closely monitor the project’s community and social media channels. Acting quickly on favorable news—buying immediately and then selling—can generate profits (again, 1intro provides a relevant case study).
Third, the project team’s vision and execution matter. For example, insufficient liquidity provision post-launch can negatively impact the token price. Currently, $FJO has a pool size of 5.8M, which is acceptable.
3. Fjord Foundry Tokenomics and Protocol Data
$FJO has a total supply of 100 million tokens.
Distribution breakdown ⬇️ Initial circulation approximately 10.65% (calculated manually, corrections welcome). Seed round price was 0.2—seed investors could immediately realize profits by selling.
Token utility ⬇️
Users can stake $FJO to receive a portion of protocol revenue via token buybacks, and $FJO stakers may also qualify for potential project airdrops.
Protocol data ⬇️
Total fee revenue is 28M.
Since launching v2 in December, Fjord has generated 10M in protocol revenue. Thus, its projected annualized revenue for this year is roughly 30M.
Conclusion
Given the confirmed upward trend of the bull market, many developers hope to capture opportunities within this cycle. As such, Fjord’s potential revenue prospects appear quite strong. Going forward, Fjord plans to expand onto other chains (such as Solana, Berachain, Fantom), and new chain deployments will serve as catalysts for revenue growth.
Fjord’s token economy involves using at least 90% of protocol revenue to buy back and burn $FJO. Ultimately, the core logic is simple: the higher Fjord’s protocol revenue, the better $FJO’s price performance will be.
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