Common Launch Methods

Web3 token launches use mechanisms like IDO, ICO, IEO, and LBP. Each has unique advantages and disadvantages, shaping fundraising, liquidity, and community engagement strategies.

IDOs (Initial DEX Offering)

IDOs use on-chain mechanisms for token launching, distribution, and fundraising. They rely on smart contracts and AMM liquidity pools, with tokens listed on a DEX. This was a common mechanism in the recent bull market, especially for metaverse projects.

Pros:

• Easy to build, run, and understand;

• Decentralized and transparent;

• Immediate liquidity on a DEX at launch;

• Early community access at below-market price;

Cons:

• Allocation and distribution can be challenging;

• Price set without community-driven discovery;

• High transaction volumes may cause technical issues;

• Centralized seeding of DEX liquidity pools can cause timing, communication, and liquidity problems;

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ICO/IEO (Initial Coin/Exchange Offering)

ICOs or IEOs are token sales conducted via a centralized exchange or intermediary.

Pros:

• Credibility through exchange due diligence;

• Immediate listing on a centralized exchange;

• Instant access to a large user base;

• Simple and convenient;

• Potential for larger fundraising;

Cons:

• Exchanges may charge high fees or take significant token supply;

• Regulatory uncertainty;

• Centralized control and dependency on the exchange;

• Limited transparency off-chain, with potential for questionable practices;

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LBP (Liquidity Bootstrapping Pool)

The LBP (Liquidity Bootstrapping Pool) is a popular DeFi launch mechanism. It creates a liquidity pool with a bonding curve and uneven token weighting, where token prices gradually decrease over time. Users can buy tokens at different price points, with their purchases affecting pool weighting and the curve’s trajectory. This dynamic allows participants to engage in price discovery and seek advantageous entry points throughout the launch.

Pros:

• Fair distribution through a gradual price decrease;

• Community-driven price discovery;

• Incentives for early buyers;

• Controlled token supply;

Cons:

• More complex than traditional sales;

• Timing risk for participants;

• Potential price volatility throughout the LBP;

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Alternative launch models

Over the years, various alternative DeFi-native launch mechanisms have been developed to address common challenges. OruxAI is integrating many of these solutions while also innovating and introducing new mechanisms, some of which are detailed in our Modular Launches section. We work closely with the community to continually enhance this space.

These new mechanisms include:

• Fair Auctions: Tokens are allocated through a transparent auction with competitive bidding, ensuring equal opportunity and a uniform final token price.

• Dutch Auctions: Token price starts high and decreases until reaching a buy-in price, promoting fair distribution and efficient price discovery.

• Liquid Auctions (Liquidity Bootstrapping Auction): Bootstraps liquidity for a new token by allowing contributions on either side of the pool. Users can lock positions for a set period and receive new tokens proportionally at launch.

• Lockdrops: Participants lock a token or LP position for a period, receiving new tokens proportionally at launch, encouraging long-term commitment and active community engagement.

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Each launch mechanism comes with its own advantages and trade-offs. Supporting multiple mechanisms is therefore crucial to provide projects with the flexibility needed for more sustainable token launches.