Copper: An innovative way to launch projects

Copper, as a fair launch auction platform (FLA), has emerged to provide a new model for project fundraising and token distribution. This model is known for its openness, transparency, and user-friendliness, backed by Balancer's LBP technology.

FLA is essentially a crowdfunding mechanism that allows individuals from around the world to provide funding support for innovative projects and ideas in exchange for tokens representing equity in the project. This method eliminates intermediaries, breaks down capital and geographical restrictions, and does not impose any entry barriers. It does not require KYC and does not offer special privileges to large investors. This allows funds to flow directly and freely to the most valuable projects while enabling investors of different backgrounds and sizes to participate fairly in early investment opportunities.

What does FLA mean for all parties involved in the auction? It provides the opportunity to acquire tokens at a relatively fair price over a longer period. The typical FLA structure has a higher token price at the beginning of the auction, which then gradually decreases. This mechanism not only offers a fair opportunity for all participants but also allows them to collectively determine the issuance price of the tokens.

For project parties, FLA provides a low-cost, high-efficiency liquidity guidance method. The high prices during the early stages of the auction help to prevent bot operations and price speculation. Over time, the price naturally decreases due to the preset weighting mechanism. This design effectively prevents front-running behavior and the common issue of severe price fluctuations in traditional token issuance.

Compared to traditional ICOs/IDOs, FLA shows a significant advantage in the fairness of token distribution. It ensures that both early and late participants have equal opportunities to obtain shares before the auction ends. This contrasts sharply with the past practices where venture capitalists and large holders could acquire tokens at prices far below the public offering price and then sell them to retail investors at high prices.

The operation mechanism of FLA is relatively simple. The project party auctions its ERC20 tokens through the Balancer liquidity pool on the Ethereum network. At the beginning of the auction, the token price is high, and then it gradually decreases. However, if enough new buyers participate, the downward price trend may be offset or even reversed.

The reasons for adopting the FLA method are mainly as follows:

1. Beneficial for both the project parties and investors. The project can raise funds with lower initial costs and risks.

2. Expand the community scale. With a low entry threshold, more people can join the project in its early stages.

3. Reduce the risk of price fluctuations. The broadly dispersed holdings reduce the risk of large-scale sell-offs after listing.

4. Fair and transparent. Every participant has an equal opportunity, and the price formation process is open and transparent.

Overall, FLA provides a new method for project initiation and fundraising that takes into account the interests of all parties. While it may not be suitable for all situations, FLA is undoubtedly a choice worth considering in projects that pursue fairness, transparency, and community involvement.