Community-First Fair Launch: A Brief Introduction
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We are thrilled to be the first platform to offer auto-repaying, non-liquidating loans on AVAX, BTC, and stablecoins like USDC, USDT, and DAI. We built Savvy because we believe everyone should have access to non-liquidating, auto-repaying loans. Borrowing through Savvy is the safest way to gain access to capital while maintaining ownership of the collateral. As a result, we are not conducting any private or pre-sales. In the spirit of open and fair access, Savvy is conducting a Community-First Fair Launch. The sale will take place at fairlaunch.savvydefi.io.
This launch will give all participants equal opportunities to seed liquidity for the protocol and acquire SVY tokens on the Avalanche blockchain. Our carefully designed dual-phase approach includes a Liquidity Generation Event (LGE) and a Liquidity Bootstrapping Pool (LBP). Participation provides robust protection against manipulation and unfair advantages.
This article will cover Savvy’s goals and principles behind our Community-First Fair Launch, including an explanation of each phase (LGE and LBP) and the benefits of participation. We added a fair launch calculator for you to learn more. The following article can get a bit complicated at times — so if you have any questions, reach out through Discord.
Comparison of the Two Phases
Here is a high-level overview of the phases of the fair launch. It shows the differences, providing flexibility to participants depending on their preferences.
Reasons to Participate
Exclusive boosted allotment rewards
The fair launch is the only opportunity for participants to earn additional allotments through the redlist boost and vesting period boost, which can significantly increase the number of SVY tokens you can acquire for your USDC.
Early access to SVY Token and its utility
Participating in the fair launch will give participants first access to the SVY token and a Savvy line of credit. Participants can take advantage of the token’s features and benefits before it becomes widely available.
First mover advantage
Participating in the fair launch will give participants the same level of access to the token purchase as insiders and venture capitalists.
Supporting a decentralized ecosystem
Participating in the fair launch will support the project and contribute to the growth of a decentralized ecosystem.
The Savvy Plan: Community-First
21.50% of the capped 10M SVY token supply, or 2.15M, will be allocated to the fair launch. This launch consists of two phases: an LGE and an LBP. The LGE is a 10-day event that allows participants to purchase allotments of SVY tokens using USDC. The LBP is a 3-day event that identifies the fair market value of the SVY token and distributes as much SVY as possible at the market price. This dual-phase approach was inspired by the Byte Mason’s successful $OATH fair launch.
The LGE is the first opportunity for participants to purchase ‘allotments of SVY’ tokens using USDC. Participants can earn additional rewards through the NFT redlist and vesting period rewards. Most funds raised from the LGE will be placed into svToken stable swap pools (i.e., svUSD-USDC pair). The remaining funds will be used for SVY-USDC and SVY-AVAX pools and project operations.
Following the LGE, phase two of the launch begins — the three-day Liquidity Bootstrapping Pool (LBP) event. An LBP liquidity pool uses a dynamically weighted and unbalanced automated market maker approach. The LBP relies on a pre-configured token value decay curve and the market’s natural buy and sell pressures to determine the value of SVY tokens. During this phase, participants can trade (either buy or sell) SVY tokens with a small fee to discourage bot activity.
Overview of the LGE
To ensure fairness and equity among participants, the LGE features a token allocation process that distributes 1.55M SVY tokens among all participants who purchase allotments.
During the LGE, participants can purchase as many allotments as they want during the event. By default, one LGE allotment can be purchased for $1 USDC. To incentivize longer-term holding and provide an added layer of protection against manipulation, allotments can be boosted by applying eligible red-listed NFTs and choosing to vest tokens for longer periods. Vesting liquidity boosts are as follows: (3 months 0%, 6 months 2.2%, 1 year 7.2%, 2 years 19.2%, 4 years 47.7%, 6 years 80.2%)
The 1.55M SVY tokens will be divided among the total LGE allotments distributed at the end of the LGE.
For example, if the total allotments to be distributed is 1, the owner of that allotment would receive 1.55M SVY tokens. If the total allotments distributed is 1.55M, each allotment will receive 1 SVY token. In case the total allotments distributed is 3 million, each allotment would receive 0.52 SVY tokens per allotment. And if the total number of allotments distributed is 10 million, each allotment would receive 0.155 SVY tokens per allotment.
This approach ensures that the distribution of SVY tokens is proportional to the number of allotments purchased, providing a fair and equitable opportunity for all participants to own a piece of the project for the same price per token.
Redlist and Vesting Period Rewards during LGE
By using allotment boosts, participants’ USDC goes WAY further. To see how this can play out for you, you can use our LGE Calculator: LGE Boosted Rewards Calculator.
The Liquidity Generation Event (LGE) offers participants a unique opportunity to boost their allotments and get more SVY tokens for their USDC. With boosted allotment rewards, participants can get more LGE allotments for the same $1 USDC.
The boosted rewards can be obtained in the redlist boost and the vesting period boost. The redlist boost allows participants to get additional allotments if they own an NFT. Learn more information about the redlist.
The vesting period boost is another way to access the largest reward possible. Participants can choose a vesting schedule (ranging from 90 days to 6 years) to receive their SVY tokens at different periods. The longer the vesting period chosen, the more boost users receive. This encourages long-term holding and supports the overall stability and growth of the ecosystem.
Toe Dipper vs Savvy Maxi
The boosted allotment rewards can significantly impact the number of SVY tokens an individual can acquire during the fair launch. To illustrate this, let’s compare two individuals who both decide to participate in the Liquidity Generation Event (LGE):
A — Toe Dipper.
This individual is not an NFT owner and only chooses to vest for 90 days. As a result, they do not receive any rewards and can only purchase 1 allotment of SVY tokens for every 1 USDC.
B — Savvy Maxi:
Savvy Maxi and DeFi user Jason has 100 USDC and a redlist NFT with a 10% boost. He chooses a 4 year vesting option with a 47.7% boost. After using the calculator, his overall boost is 61.7%. Let’s consider the LGE scenario in which 10M allotments are issued corresponding to the 1.55M SVY: with the 61.7% boost, he is allotted 162 out of the total 10 million allotments issued after the sale ends, representing 0.00162% of the total. His SVY reward is 25.11 vested over 4 years. This may also change if the purchase occurred outside the first three days of the LGE, due to the decaying nature of the redlist NFT.
The math for the combined boost works as follows ( 1 + A ) * ( 1 + B ) — 1 where A is vest boost and B is redlist boost.
Liquidity Bootstrapping Pool
Once the ten-day LGE phase is completed, the fair launch’s second and final phase is the seventy-two-hour Liquidity Bootstrapping Pool (LBP). The LBP is designed to ensure fairness among all participants by starting with intentionally high prices, discouraging whales and bots from dominating the pool’s liquidity. This approach allows the pool’s liquidity to be distributed among a larger group of participants, providing a more decentralized and stable market for the token.
One of the ways this is achieved is by using a natural token value decay curve found in LBP. This means that the token’s price starts very high and gradually finds its market fit, providing all participants a fair and equitable opportunity to acquire the token. This approach also allows for a more organic and stable growth of the token’s value, ensuring a better long-term outcome for the ecosystem.
The LBP utilizes a unique mechanism for discovering the true market value of the SVY token, different from traditional Uniswap-style pools. The pool’s initial ratio of SVY to collateral token (USDC) will be unbalanced, with the goal of reaching a 50/50 split or even swinging towards USDC.
The token value starts high and follows a pre-configured token value decay curve. As the weight of the tokens shifts, the token price of one token experiences sell pressure while the other experiences buy pressure. These releases impact the supply, leading to a drop in token value, but as demand increases, the value can rise with buying pressure. Over time, the token value will automatically decrease by design until buy pressure impacts it at any stage of the LBP. This approach allows for a more natural and organic process of discovering the true market value of the SVY token.
Users can participate when the token value seems right to them. It is not a race to be the first to participate, and there is no need to battle bots. Participants can enter or exit the LBP at any point during the event, making token value discovery a self-regulatory process, ensuring that the distribution of tokens is fair and equitable. The token value will start high to discourage bots and speculation, allowing true price discovery.
Once purchased, the token is immediately distributed to the participant. Participants can buy or sell their tokens at any point during the LBP, with a 5% fee in place to discourage bot activity and ensure a fair and equitable distribution of tokens among all participants.
Please note that the specific details and numbers outlined in this article are subject to change as we approach the launch date. It is important to stay informed and check for updates as the event approaches.
LBP Mechanism
The LBP mechanism uses a unique approach to discovering the true market value of the SVY token. At the end of the LGE, a dynamically weighted pool is created with 600,000 SVY tokens and an amount of USDC, paired at an unbalanced ratio such as 95% SVY tokens and 5% USDC (actual weights will be announced closer to the pool launch date).
By the end of the LBP, a token value is discovered through this unique, self-regulatory process, providing a fair and equitable opportunity for all participants to acquire the token at its true market value. This approach ensures a decentralized and stable market for the token and provides transparency throughout the token value discovery process.
An example of how the LBP token value decay may look:
From Byte Masons, in the article Everything You Need To Know About Oath:
The general strategy for an LBP is to wait until the last minute to buy in at the lowest price. The risk, of course, is that everyone else is doing the same. So the closer to the end of LBP you get, the greater the chance that many buys will push the price up significantly. This somewhat incentivizes early purchasing. However, deep liquidity in the LBP makes the curve more difficult to move and, therefore, more costly for deep pockets to manipulate.
Buying & Selling into the LBP (Trading Fees)
When you purchase during the LBP, your SVY tokens are distributed, and you can claim them. Anyone can buy or sell into the LBP, and there is a small fee.
Final Thoughts
We look forward to the launch and invite you to get Savvy. It is important to conduct thorough research and assess the risk before participating in any fair launch event
