Liquidity Bootstrapping Pool (LBP)

The liquidity bootstrapping pool (LBPs), also commonly known as a smart pool configurable rights pool is a contract to manage the core pool used by an exchange, containing the tokens. The controllers of an LBP can only make limited changes to the specification of the pool.

Smart pools are often less trustless as compared to shared pools. It is more advantageous since the entire trust of a private pool is not required. Predominantly, LBPs are used to launch tokens with limited capital.

A smart pool is achieved by setting up a two-token pool. This includes the project, backed by a collateral token. LBPs can be considered the future of fundraising for small projects that requires liquidity. It also ensures maximum distribution for the said token.