Initial Weights of Tokens

In the context of a Liquidity Bootstrapping Pool (LBP), "weight" refers to the relative importance or influence of a token in determining its price within the pool.

The initial weights of Token A ($Weight_A$) and Token B ($Weight_B$) are crucial for setting the starting price ratio between the two tokens. A higher initial weight for Token A relative to Token B makes Token A more expensive at the start of the LBP.

As the LBP progresses, the weight of Token A typically decreases, while the weight of Token B increases. This shift leads to a gradual reduction in the price of Token A, promoting a smoother price discovery process.

Impact on Initial Spot Price

Increasing $Weight_A$ and Decreasing $Weight_B$ raises the Spot Price of Token A, making it more expensive relative to Token B.

Decreasing $Weight_A$ and Increasing $Weight_B$ lowers the Spot Price of Token A, making it cheaper relative to Token B.