Price Discovery
Rocket Joe Price Discovery Mechanism

Introduction

This guide will provide an overview of how the Rocket Joe price discovery mechanism works.
Rocket Joe is a Liquidity Launch Platform that facilitates the launch of a Token, by seeding the Liquidity Pool for the protocol that is launching a Token.
Protocols utilizing Rocket Joe will provide x number of tokens that are split amongst participants who deposit AVAX into the Launch Pool.

How does the Price Discovery work?

Rocket Joe allows for fair price discovery during the deposit phase. Participants depositing their AVAX will be defining the price, in real-time. The more AVAX that gets deposited, the higher the Issuing Token price will be. This is because more AVAX is being paired against the Issuing Token.
The Issuing Token price on Rocket Joe is not fixed/set like a traditional IDO Launchpad
During the deposit phase, participants will be able to view the real-time market price being set during price discovery.
Price Discovery Graph

Price Discovery Outcomes

Below we run through two scenarios for Rocket Joe, the difference in demand for the token, based on the amount of AVAX deposited, highlights the outcome of the price discovery mechanism, for the HON Token.

Assumptions

  • AVAX Price $65
  • HON Tokens in Rocket Joe: 4m

Total AVAX Deposited: 15,000 ($975k)

  • 15,000 AVAX deposited is paired with 4m HON Tokens
  • You deposit 5 AVAX
  • At the end of the launch phase, you receive 2.5 AVAX and 666 HON Tokens
  • The implied price of HON: $0.24

Total AVAX Deposited: 25,000 ($1.6m)

  • 25,000 AVAX deposited is paired with 4m HON Tokens
  • You deposit 5 AVAX
  • At the end of the launch phase, you receive 2.5 AVAX and 400 HON Tokens
  • The implied price of HON: $0.41

Withdrawal

Participants have up to 72 hours to withdraw before Launch engages and locks participants into the Liquidity Pool. Participants may wish to withdraw if they feel the price of the Issuing Token is too high.

What happens when I withdraw from the Launch Pool?

  • You receive your AVAX back
  • You do not receive your submitted rJOE back
  • If you wish to re-enter after withdrawing, you can re-enter if the deposit phase is still open
Withdrawal fees
  • No fees for the first 24 hours
  • Fees that scale linearly between 24 hours to 48 hours
  • Fixed fee in the final 24 hours

Launch

At the end of the Launch phase the LP is unlocked, you can now claim your LP Token from the Liquidity Pool and deposit it into a Farm, or you can withdraw those Tokens from the LP.
During the Launch phase, participants locked into the LP will receive 'Bonus Issuing Tokens' eg +10% HON distributed to the Locked Liquidity Pool Providers

Why Participate in Rocket Joe?

  1. 1.
    Access Launches to acquire newly issued Tokens before they launch into the open market
  2. 2.
    You control your allocation, deposit more AVAX and get more Tokens in return
  3. 3.
    Earn bonus tokens and accrue Trading Fees in the LP during the Launch phase
  4. 4.
    No KYC is required