Fair Launch Protocol Guide for NFT projects and their communities

Fair Launch Protocol was developed by Jordan (redacted_j) and Bartoz (baalazamon) as a social trust experiment and a system for offering fair NFT project launches while protecting both the community and the artists.

In this protocol, a project sells:
- Tickets to a lottery that distributes tradeable tokens that are redeemable for an NFT (either immediately or at a future date)
- At a community-crowdsourced price
- With anti-rug provisions for investors and projects

Buyers make 2 key decisions throughout the life of the project:
1. How much do you think a mint is worth?
2. Do you accept the final price?

For projects with a future delivery, if the team doesn’t meet the delivery date, you have a third decision:
3. Get a pro-rated refund, or give the team more time.

It all breaks down into 3 parts: Lottery, Waiting Period, and Redemption.

Lottery Phase 1 — Buying a ticket

FLP launch day has arrived! But you’re at work. NBD. You have a full day to participate.*

Before you buy, you will have the opportunity to review the following to inform your decision:
1. Lottery Start/End Dates
2. Percentage of Treasury project is allowed to withdraw to fund development activities
3. Participation fee
4. Expected NFT delivery dates (either immediate redemption or future redemption)
5. Project’s minimum and maximum mint prices
6. Percentage of Tokens that must be redeemed in order to release remainder of treasury to the project.

Now, the project has done all they can to woo and inform you, but YOU get to decide how much you want to spend.

Do you drive the price down to get higher secondary market upside, but at the risk of not making it through the lottery? Do you improve your lottery odds but add secondary market risk?

You can change your mind at any time and withdraw your funds, less a small fee set by the project.

Lottery Phase 2: Price setting and participation decision

Upon the conclusion of the ticket buying phase, a price is determined as the median of all tickets purchased. You now have to decide whether you want to accept that price. If the price determined is higher than what you submitted, you’ll pay the difference in order to participate. You can also choose not to move forward and get a refund, less the fee mentioned above.

Lottery Phase 3: Token distribution

If demand exceeds the number of NFTs offered, then distribution will be managed by lottery. FLP handles this process as part of the system, and makes every effort at making this process auditable. However, for full disclosure, the actual randomization process takes place off-chain, as Solana does not currently have the ability to generate random numbers on-chain.

Waiting Period

Projects can use FLP to launch NFTs that are ready right now and take advantage of the community pricing feature.

However, many projects will choose to use FLP for fundraising, so they will have a Delivery Date that they committed to in the Lottery Phase. The Waiting Period is the time between the end of the Lottery and the Delivery Date.

Because the NFT IOU tokens that are distributed are regular SLP tokens, so wise projects will set up a DEX to allow these to be traded during the Waiting Period. Through trading, you can increase your allocation, or sell your allocation if you need liquidity sooner.

You will not be able to get a refund at this stage.

Delivery Date

When a project is launching immediately without a future Delivery Date
Immediately after the lottery completes, tokens will be distributed to all winners, and they can redeem those tokens at a Candy Machine.

When a project meets their Delivery Date
When the Delivery Date arrives then users will be provided with a Candy Machine or some similar mechanism to redeem redeem their token for an NFT. The remainder of the treasury is released to the team when a predefined percentage of tokens have been redeemed.

When a project fails to meet their Delivery Date
If the project fails to meet the date, holders of the token have a choice:
1. Hold onto their tokens and wait longer (if they still believe in the project)
2. Get a prorated refund (based on the unreleased amount of Treasury)

A project that is truly a rug will only come out with a very small amount of their original raise, as all holders will seek refunds.

A project that misses their date in good faith (they were too optimistic on their delivery date) can seek trust from the community and ask them not to return their tokens for refunds.

Anyone who gets a refund will not have their place held later if the project still delivers.

FLP Benefits for Project Founders, Developers and Artists

Fundraising

There is SO MUCH pressure for projects to rush right now. There are an amazing number of cash grabs competing for eyeballs and mindspace right now, which tempts the highest quality projects into moving quickly. But in business, you only have three optimizers: low cost, fast, and high quality… and you only get to pick two. You know which one gets sacrificed. Quality.

FLP can help buy you time by capitalizing on current hype while mobilizing your community and rewarding those who got in early.

Community mindfulness

There’s a lot of blowback these days on pricing. People feel taken advantage of when project sets their price at 5 SOL knowing they could sell out on FOMO alone. They’ve started to vote with their Solana Wallets by not participating in projects that don’t consider pricing carefully.

FLP allows the community to set the price. They vote with their SOL within a range of potential prices you set.

FLP Benefits for Community and Investors

Getting in early

When a project is doing something great, it can take time and money. By the time they’ve completed their work and they’re ready to launch, excitement may be at fever pitch.

FLP allows community members to contribute to a project early on and secure they’re place.

Opportunity to influence price

With FLP, you’ll get to have an influence on the mint price. And if you don’t like where the price lands, you aren’t locked in.

Layers of protection

In a space that increasingly has to deal with scams, FLP offers a safer alternative to getting into a project, where the team is incentivized to deliver, and is unable to run away with all your money in a scam.

FAQs

As we have a preference for real Frequently Asked Questions, we’ll monitor social media and update this section regularly.