⚗️| Step-by-Step Breakdown

· Step 1: Setting Up the Pool The process begins with establishing the LBP, where the project's new token is paired with a secondary asset, often a stablecoin. This pairing forms the basis of the liquidity pool.

· Step 2: Dynamic Weight Adjustment Unlike traditional liquidity pools with a fixed token ratio, LBPs allow for the dynamic adjustment of the weight between the two tokens. This adjustment is crucial in managing the initial price of the new token and controlling its supply in the pool.

· Step 3: Initial Token Pricing The initial price of the new token is set higher, with a corresponding lower supply in the pool. This strategy is designed to deter large-scale purchases at the start and prevent price manipulation.

· Step 4: Gradual Price Reduction Over a predetermined period, the weight of the new token in the pool decreases, leading to a gradual reduction in its price. This decrease is controlled to prevent abrupt market fluctuations.

· Step 5: Prolonged Price Discovery Phase The extended period for weight adjustment allows for a longer price discovery phase. This phase enables market participants to observe the token's performance and engage at a price they find reasonable.

· Step 6: Reducing Market Manipulation Risks The gradual and controlled price change in LBPs minimizes the risk of market manipulation by large investors or automated trading systems, promoting a fairer trading environment.

· Step 7: Finalizing the Price Discovery Once the predetermined period ends, the final token price is established based on market demand and participation. This price reflects a more accurate and market-driven valuation of the token.

· Step 8: Closing the LBP After the price discovery phase concludes, the LBP is closed. The project can then transition to traditional trading models or other liquidity provisions as required.