The Axo liquidity seed event (LSE) is set to commence on January 9th at 12 pm GMT. This crucial event aims to generate protocol-owned liquidity, vital for populating Axo's virtual order book and ensuring a smooth trading experience. It bears restating that 100% of funds generated during the LSE will be locked to the protocol.
Eligible tokens
525,000 AXO tokens are available for the LSE, where participants can exchange ADA and various Cardano native tokens (CNTs) for AXO. 262,500 AXO will be dedicated to the ADA/AXO pair, underscoring its importance in the trading ecosystem and helping the protocol generate initial ADA liquidity. The remaining 262,500 AXO will be used to acquire Cardano's most popular tokens to seed the virtual order book. Thanks to the efficient design of Axo, only a minimal amount of liquidity is needed. See the graphic below for the amount of AXO allocated for each token.
How it works
The LSE employs a dynamic supply and demand pricing algorithm, facilitating a fair and transparent exchange of AXO.
The algorithm prices AXO based on the percentage of time that has elapsed since the start of the LSE and the percentage of allocation remaining. This will result in AXO tokens being sold at varying prices throughout the 5 day LSE event.
If more tokens are bought than time has elapsed, the price will increase as the demand exceeds the supply. Similarly, prices will decrease if more time has passed than supply is remaining.
The algorithm will adjust the price upward or downward along an exponential curve, following the golden ratio to provide an optimal price distribution. The formula is as follows:
CNT pricing
To determine the price of Cardano native tokens in relation to AXO, an oracle will observe the price of AXO/ADA and each CNT/ADA pair. For example, if 1 AXO is 40 ADA, and 1 SHEN is .5 ADA, then 1 AXO will be 80 SHEN.
To reiterate, there is no lock-in with the LSE. Users are free to buy AXO at favorable prices and take profits as desired. By pricing the demand, we will discover the true price of AXO.
Facilitating fair access
Anti-bot protection has been incorporated in the form of ladder order placement. This encourages smaller purchases across the entire run of the LSE.
Pre-trading
Everyone is welcome to participate in the LSE; there's no need for whitelists or registration. To take part, visit the LSE landing page.
At 11 am GMT, an hour before the LSE begins, you will be automatically loaded into the Axo trading interface for pre-trading. Here you’ll have an opportunity to place your buy orders before trading begins, eliminating price sniping. Connect your Eternl or Nami wallet and start placing orders via Axo Basic, or use the Pro toggle at the top to view the order book and access advanced trading features. Pre-trading allows a large group of participants to place orders fairly without congestion, as everyone has time to load the order book before the event starts.
Post-LSE
Following the LSE, a 2-day preparation phase begins, where the price discovery algorithm is stopped, and the protocol-owned liquidity is added to liquidity bonding strategies for a healthy order book at launch. This time allows participants to refine their strategies and position their liquidity, mitigating post-launch mayhem.
Mainnet launch
Axo's mainnet is set to launch exactly one week after the LSE start: January 16th, at 12 pm GMT!
Conclusion
The Axo liquidity seed event presents a unique opportunity to be among the first to trade AXO while contributing to the protocol's value and efficiency. Your participation will help establish a robust virtual order book, promoting more cost-effective trades with minimal slippage. Join us in shaping the future of Axo.