Initial Token Volumes

In the context of a Liquidity Bootstrapping Pool (LBP), "volume" refers to the quantity of tokens available in the pool for trading.

The initial volumes of Token A ($Volume_A$) and Token B ($Volume_B$) in the pool determine the liquidity available and directly affect the Spot Price at the beginning of the LBP. The ratio of these volumes influences how accessible Token A is to potential buyers.

The choice of initial token volumes is key to setting the initial market perception of Token A's value and can help achieve the desired balance between accessibility and exclusivity.

Impact on Spot Price

Increasing $Volume_A$ and/or decreasing $Volume_B$ lowers the Spot Price of Token A, making it more affordable relative to Token B.

Increasing $Volume_B$ and/or decreasing $Volume_A$ raises the Spot Price of Token A, making it more expensive relative to Token B.