What Is a “Liquidity Bootstrapping Pool” (LBP) and How Is It Used for Capital Acquisition?

An LBP is a type of smart pool that utilizes a dynamic weighting mechanism to facilitate token distribution and price discovery. It starts with a very high initial price due to the pool's weight favoring the reserve asset (e.g.

ETH or USDC) and then gradually shifts the weight to the project's token. This design allows the price to fall over time, deterring bots and large buyers from front-running, and enabling a fairer distribution to a wider range of participants.

It's a popular method for capital raising.