MILK LB Event FAQ
On the 11th October we announced the MILK liquidity bootstrapping events. For more details please check our Medium announcement https://medium.com/@muesliswap/milk-liquidity-pool-bootstrapping-event-3af1bc256de0. If you'd like to participate, you can visit https://muesliswap.com/launchpad.
This document is a collection of the most frequently asked questions to help you better understand the event. If you have another questions, feel free to ask us on Twitter, so that we can add the answers to this guide.
What is the reason for this event?
In order for a token to have high price stability, it is important that there is a lot of liquidity for the token. If liquidity is low, small buy or sell orders may have significant impact on the price. Therefore, we launch this event in order to increase the amount of liquidity for the MILK/ADA pair and stabilize the market price for the token.
Can I redeem my ADA back?
Yes - you can withdraw your LP tokens after the event ends. The equivalent value will be returned in half ADA and half MILK tokens.
What will be the price of Milk used for this special liquidity pool?
The idea is as follows: As soon as ADA is provided, the ADA is paired with MILK at the current price in the existing MuesliSwap liquidity pool. Both tokens are then added to the liquidity pool (market price). Throughout a maximum of 10 days, the liquidity is added and the liquidity tokens are collected. At the end of the period, the liquidity tokens are then distributed to all participants. What that means is that even though liquidity is provided at certain moments in time, the continuous batching causes Dollar Cost Averaging throughout the entire campaign.
Let's presume that Milk’s price is 3 ADA for this liquidity pool. What happens if we receive more than 1,5M ADA in this pool? Will you be returning the ADA exceeding the value of 500K Milk, or will you close the pool for new participants as soon as the value of 500K Milk is reached?
In this case, we would close the campaign after the maximum amount has been received and end the campaign early. We will still be performing an ADA cost averaging across the 10 day event period.
Will the team withdraw the liquidity used for the campaign in the future? Or will the other half of LP tokens be locked in the pool indefinitely
We are planning on keeping a very large fraction of the liquidity in the pool. If we upgrade to newer pool contracts (e.g. concentrated liquidity pools, newer versions of the AMM contracts) we will also migrate the MILK liquidity bootstrapped.
What happens after four weeks? Will the zap-in farm merge with the regular one, or will the zap-in farm become the regular one where everyone has the same yield?
The farms will be merged and everyone will have the same Yield.
Can Hungry Cows NFT be used in the zap-in farm to boost the yield even more?
Hungry Cows can be used to boost the zap-in farm.
Why wasn't this communicated with the community in advance?
As always at MuesliSwap we appreciate your feedback. The idea to perform a liquidity bootstrapping event is not new and has been presented in our governance forum https://gov.muesliswap.com/t/ideas-to-bootstrap-milk-liquidity-pool/2372 where we received likes/comments from many community members.
Why can't I add MILK instead of ADA?
The basic requirement for liquidity pools is that there is 50% of liquidity in MILK and 50% in ADA. Adding MILK alone doesn't work for liquidity pools, as the fundamental idea is to include the liquidity pools as AMMs in our orderbook. For that to work the automated market maker needs to have both ADA and MILK available. After the initial liquidity bootstrapping event ends our normal yield farming starts. For this event you can add your MILK paired with ADA into the existing liquidity pool.
What is this MLBE Token I received after participation?
The MLBE Token represents a share in the participation at the MILK LB Event. 1 Token is equivalent to 1 ADA contributed to the liquidity bootstrapping. It will later be used in the boosted yield farm and can be redeemed for usual MILK/ADA LP token as soon as yield farming starts.
The official policy ID of the token is