How to Participate in the Vertex LBA

How to Participate in the Vertex LBA

The Vertex Liquidity Bootstrapping Auction, or LBA, will occur from November 13th → 19th.  

This blog will cover everything you need to know ahead of the LBA. Contents include:

  • What, Why & How 
  • The LBA Timeline 
  • Important Things to Remember
  • Step-by-Step Tutorial on How to Participate 

The LBA: What, Why & How? 

The LBA was designed to accomplish: 

  1. Setting a fair launch price for the VRTX token via the organic interactions of supply and demand. 
  2. Create an initial base pool of liquidity for VRTX.
  3. Avoids price volatility and spikes that hurt community members and only benefit those trading via bots.

The LBA lets the market determine the launch price of the VRTX token by: 

  1. Enabling participants to supply VRTX (pre-claimed*) and USDC.e. 
  2. Combining the two pools into one VRTX-USDC.e pool on the Vertex AMM.
  3. The implied price from the LBA determines the launch price.

In return for locking up VRTX tokens and/or USDC.e, the LBA participants can acquire additional tokens – earning VRTX rewards during the vesting period.

For additional context, make sure to read the Part 1 overview of the LBA in the post here.  

LBA Timeline & Liquidity Vesting

Start: 13:00 PM UTC on November 13th, 2023 

End: 13:00 PM UTC on November 20th, 2023

Duration: 7 Days 

The LBA can be broken down into 2 periods: 

  1. A contribution period where participants can:
  • Pre-claim and Supply their VRTX rewards earned during epochs 1 - 7 of the Trade & Earn program.
  • Supply and withdrawal USDC.e. 
  1. A withdrawal-only period where participants can only complete one USDC.e withdrawal for the remainder of the LBA. Restrictions on the amount of USDC.e apply (see below).  

The primary period for users to participate in the LBA is the contribution period, which lasts for the first 5 days. The withdrawal-only period is only available to users that engage in the contribution period (Days 1 → 5).  

Contribution Period – USDC.e Supply & Withdrawal 

When: Days 1 → 5

During the contribution period, you can supply and withdraw USDC.e freely. No restrictions apply to either the number of withdrawals or the amount of USDC.e withdrawn. 

Withdrawal-Only Period – USDC.e Withdrawal Restrictions

When: Days 6 → 7 

Starting on Day 6, you can make up to 1 withdrawal of USDC.e for the remainder of the LBA. 

The max amount that you can withdraw depends on which day you choose to withdraw: 

  • Day 6 – 50% of your total USDC.e supplied. 
  • Day 7End of LBA: The max amount withdrawable decreases from 50% to 0% linearly over the remaining 24H. For example;
    • Alice Supplies 1000 USDC.e on Day 1 of the LBA.
    • On Day 7, Alice decides to withdraw the USDC.e with 12 hours remaining until the end of the LBA.
    • Alice has the ability to make one withdrawal. 
    • The withdrawable amount decreases linearly, meaning Alice can only withdraw up to 25% of her original USDC.e deposit. 
    • Alice withdraws 250 USDC.e from the USDC.e pool.

After the LBA – LP Position Vesting 

Liquidity provided during the LBA will be locked and gradually unlocked during a 120-day vesting period. 

Once the LBA concludes, the VRTX and USDC.e liquidity supplied to either pool will fuse to create the VRTX-USDC.e pool on the Vertex AMM. The LBA participants will receive an LBA position, which are similar to LP positions on a conventional x * y = k AMM, where they represent a degree of ownership over the pool. 

LBA positions will initially be locked for 60 days, meaning no liquidity can be withdrawn. 

Once 60 days have passed since the LBA’s conclusion, ⅓ of a user’s position will immediately unlock. The remaining ⅔ will vest linearly over 60 more days.

In Summary

  • Initial LBA Position Lock-Up = 60 Days after the LBA ends.
  • First LBA Position Unlock = ⅓ of a user’s total (locked) LBA position immediately becomes available.
  • Linear Vesting = ⅔ of a user’s LBA position vests linearly over another 60 days.
  • Total Vesting Period = 120 Days       

FAQ & Important Things to Remember

Make sure to familiarize yourself with the below ahead of the LBA: 

1. Where is the VRTX supplied to the LBA coming from? 

The VRTX trading rewards, which early Vertex users earned during epochs 1 → 7 of the Trade & Earn program. These VRTX tokens are eligible to pre-claim and supply to the LBA. 

2. What does pre-claiming VRTX mean?

Claiming your pending VRTX trading rewards and supplying them to the LBA is called “pre-claiming” because it occurs before the liquid claiming of VRTX rewards during the official token launch on November 20th.

Pre-claiming could also be considered “pledging” your rewards since they will be locked and vested per the schedule above.

3. What are the benefits of pre-claiming?

Community participation in the LBA is incentivized with: 

  • Build an LBA position (i.e., LP) with the trading rewards you already earned during epochs 1 → 7.
  • LBA positions earn dual rewards (pool fees + VRTX incentives). 

4. You can pre-claim a portion of your rewards. 

You will have the ability to pre-claim a portion of the VRTX rewards you earned and supply them to the LBA – meaning you don’t have to pre-claim 100% of your tokens, and the remaining rewards can be immediately claimed after the LBA without a lock-up and vesting period.  

5. Pre-claimed VRTX rewards cannot be withdrawn. 

You cannot withdraw the VRTX you have pre-claimed and supplied to the LBA. It will be locked into the LBA position and vest accordingly.

6. USDC.e supplying/withdrawing is done via your wallet.

If you plan to supply USDC.e to the LBA, please note that it is performed directly from your wallet and NOT your Vertex account balance. 

The same goes for withdrawing USDC.e. If you withdraw USDC.e from the LBA it will appear in your wallet. 

7. You can supply & withdraw USDC.e freely during Days 1 → 5. 

There are no restrictions on USDC.e withdrawals during the contribution period. You can withdraw as many times as you’d like in whatever amounts you prefer. 

8. Starting on Day 6, you can only make ONE more USDC.e withdrawal.

If you complete a USDC.e withdrawal anytime during Days 6 → 7, then you can’t make any more USDC.e withdrawals. 

Have an unanswered question? 

Head over to the Vertex Discord and a team member will happily answer it!

LBA Tutorial – How to Participate 

The tutorial contained in this section is structured in steps. 

However, the actions you can take during the LBA are often repeatable, so the tutorial should be considered more as a general guide to performing specific actions that are available to users during the LBA. 

Step 1. Go to the LBA 

Hover on “VRTX” in the top navigation bar of the Vertex app. 
Select the “Vertex Token” page, which is where the LBA will take place. 

*For mobile, follow the same steps but use the navigation menu on the left of the screen instead. 

Step 2. Get Familiar with the LBA 

Below is visual example of what the LBA will look like on the Vertex app: 

The top section contains:

  • Timeline Graphic: You can hide/show the timeline chart using the button in the top right corner of the corresponding box. 
  • Countdown: Depicts the time until you can no longer participate in the LBA or withdraw USDC.e. 
  • LBA Real-Time Stats: Relevant metrics for the LBA  displayed in real-time. These include:
    • Total amount of VRTX and USDC.e supplied. 
    • Estimated APR for LBA positions.
    • Projected price and market capitalization of VRTX based on current pool conditions.

*You can click on the hide / show button to view the LBA timeline. 

The bottom section is where you can participate and view your LBA position.  

Step 3. Pre-Claim & Supply VRTX

If you earned VRTX trading rewards during epochs 1 → 7, known as the Initial Token Phase, then you have the option to pre-claim and supply them to the LBA. 

You do NOT need to pre-claim all of your VRTX rewards.

Once you press on the “pre-claim and supply” button, you will be prompted to select the amount of VRTX that you want to contribute to the LBA. Any remaining VRTX rewards you have can be claimed directly to your wallet after the LBA ends on November 20th. 

How to Pre-Claim & Supply VRTX: 

Click on [Pre-Claim & Supply]. 
A pop-up will appear. 
Select the amount of VRTX rewards you wish to pre-claim and supply to the LBA.
Press the [Pre-Claim & Supply] button.
Sign the transaction in your wallet. 
Success! The amount of VRTX you supplied to the LBA is reflected on the page.

*You can repeat the above steps as many times as you’d like until the end of the Day 5 contribution period or you have no VRTX rewards remaining. 

Step 4. Supply USDC.e 

Regardless if you have VRTX rewards or not, anyone can participate in the Vertex LBA by supplying USDC.e. 

USDC.e is supplied to the LBA from your crypto wallet – NOT your Vertex account balance. 

How to Supply USDC.e:

Click on [Supply USDC.e].
A pop-up will appear.
Select the amount of USDC.e you wish to supply to the LBA.
You will then need to approve the use of USDC.e for the LBA. 
Press the [Approve] button and sign the transaction in your wallet.
After approving, you can now supply USDC.e to the LBA.
Press the [Supply USDC.e] button and sign the transaction in your wallet. 
Success! The amount of USDC.e you supplied to the LBA is reflected on the page. 

You can repeat the steps above as many times as you’d like until the end of Day 5 contribution period when supplying USDC.e liquidity to the LBA is no longer available. 

Step 5. Withdrawing USDC.e 

If you supplied USDC.e to the LBA and you’d like to withdraw some or all of your USDC.e, then you can follow these steps: 

Click on [Withdraw USDC.e].  
Select the amount of USDC.e you wish to withdraw.
Sign the transaction in your wallet. 
You will receive USDC.e in your wallet – NOT your Vertex account balance.

Days 1 → 5 of the LBA: You can repeat the above steps as many times as you’d like until you have zero USDC.e supplied to the LBA remaining. 

Starting on Day 6: You can make only one USDC.e withdrawal until the LBA ends. The max you can withdraw is 50% of the total USDC.e that you have already supplied to the LBA. 

Starting on Day 7: The max withdrawable amount of USDC.e will decrease linearly over the last 24 hours of the LBA until it reaches 0%. The “Amount Withdrawable” displays exactly how much USDC.e you are eligible to withdraw based on the current restrictions. 

Step 6. View Your LBA position & Claim LBA Rewards Weekly

After 7 days, the LBA will conclude with the two pools of liquidity:

  1. USDC.e
  2. Pre-Claimed & Supplied VRTX 

The pools will be combined to create the VRTX-USDC.e pool on the Vertex AMM. 

By this point, you can view your LBA position if you participated. After one week, you can begin to claim your LBA rewards (VRTX incentives). 

How to View Your LBA Position & Claim Rewards:

Hover on the “VRTX” drop-down menu in the top navigation bar. 
Select the “Rewards Dashboard.” 

This will open up the new Rewards page. 
You will find your LBA position in the bottom card. 
Expand the summary to see a breakdown of your LBA contributions + rewards. 

If you have LBA rewards available to claim:

You can press on the [Claim Rewards] button.

***LBA positions earn a pro-rata share of the 10 million VRTX tokens (1% of the total supply) allocated to LBA participants. These rewards are distributed weekly and immediately claimable on the Vertex app.

Next Up: The VRTX Token Launch

After the LBA concludes, the VRTX token will officially launch alongside the VRTX-USDC.e pool on the Vertex AMM. 

Later this week, we will release a blog post covering the details of the token launch, including:

  1. Claiming any remaining VRTX rewards.
  2. VRTX Tokenomics.
  3. Trading and pooling VRTX.  

We hope you enjoyed today’s blog!  We’re thrilled to give community members an opportunity to participate at the ground-level of the Vertex token launch. 

– Vertex Team 

Vertex provides a decentralized protocol for trading spot digital currencies and perpetual contracts. Vertex is not authorised or regulated by the Financial Conduct Authority (FCA) or any other regulator. Since cryptocurrency markets are decentralised and non-regulated, our cryptocurrencies trading services are unregulated services which are not governed by any specific UK, European or other regulatory framework (including MIFID or MiCA). Therefore, when Vertex customers use our cryptocurrencies trading service, they will not benefit from the protections available to clients receiving regulated investment services.

Vertex customers using the cryptocurrencies trading service will not benefit from the protections available to clients receiving regulated investment services such as access to the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service for dispute resolution. All of our products carry a high degree of risk and are not suitable for many investors. It is important that you fully understand the risks involved before deciding to trade with Vertex, that you have adequate financial resources to bear such risks and that you monitor your positions carefully. Trading involves risk to your capital. You should not invest money that you cannot afford to lose. You should seek professional advice if you do not fully understand and accept the risks of investing in the products offered by Vertex. You should review our Statement of Risk before investing.