Bio Launchpad System Design

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‍This system design post covers initial designs of the Bio Launchpad, including:

1. Bio launchpad objectives
2. The high level architecture of the Bio Launchpad design
3. Dual fundraising mechanism
4. The BIO token utility
5. Bio Protocol Revenue

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Explore the Bio Launchpad

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Bio Launchpad Objectives:

1. Initial Funding: Ensure BioDAOs can quickly raise initial capital to enable their ability to fund scientific studies.
2. Demand: Integrate the BIO token into the mechanism to drive engagement with BioDAOs and scientific studies.
3. Ease of Use: Maintain simplicity for participants and BioDAOs.
4. Future Fundraising: Avoid impairing future funding opportunities.
5. Team Alignment: Secure allocations for BioDAO team members, with cliffs and vestings.
6. Launchpad retention: Encourage continued participation by BioDAOs and users.
7. System Risk: Minimise contagion risk and maintain protocol reliability.
8. PoL: Drive growth of the Bio Protocol’s PoL
9. Reliable Liquidity: provide deep and consistent liquidity for BioDAOs to reduce secondary market friction.
10. Permissionless deployment: allow for eventual permissionless deployment of BioDAOs on the BIO Protocol, without compromising security.

BIO Launchpad Architecture

‍The BIO Launchpad can be broken down into three phases:

1. Curation: This is where BIO token holders curate which newly introduced BioDAOs get access to the launchpad. These new BioDAOs require a certain number of BIO token holders to have skin-in-the-game before they are able to fundraise and launch into the liquidity protocol.
2. Funding: Once a BioDAO successfully has the BIO community buy-in, they are able to raise funds via a range of mechanisms. To start with, BioDAOs will be able to raise via either an auction mechanism or a bonding curve.
3. Liquidity: Upon a successful funding period, BioDAOs then migrate to an AMM which is denominated in BIO. Users are then able to trade in and out of these liquidity positions via the BIO token. The Bio Protocol can also provide actively managed liquidity for BioDAOs to deepen liquidity when required.

Launchpad Components

1. Curation Mechanism

When a BioDAO first comes to the platform, it requires the buy-in from BIO token holders. If BIO token holders think a certain BioDAO is a compelling, they are able to signal their preference to swap BIO for the new BioDAO’s token. Once a certain threshold of BIO tokens are committed to this action, the BioDAO successfully completes the curation process and then enters the fundraising process. If the threshold is not met within the Curation timeframe, the BioDAO is removed from the platform and curators are able to claim back their BIO.

Funding MechanismThere will be two fundraising mechanisms for new BioDAOs, an auction mechanism and a bonding curve.

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2. Auctions

The auction mechanism is a permissioned launch approach for the highest quality BioDAOs. Users will use ETH (or SOL depending on deployment environment) in exchange for BioDAO tokens.

The auction mechanism is designed to optimise for user experience and simplicity. There will be a minimum and maximum valuation, as well as a minimum and maximum raise. As users deposit funds into the auction, the valuation of the BioDAO will increase. The auction will close once the maximum valuation is reached, or the auction times out. At the end of the auction, all users will receive the BioDAO tokens at the same price and the BioDAO become tradeable on an AMM which is created programmatically upon auction close. The auction must also reach the minimum funding amount to successfully close the auction, if this amount is not reached within the time period, the auction is unsuccessful and participants will be able to claim back their deposited funds.

3. Bonding Curve

The bonding curve is a more permissionless architecture (initially will be permissioned) for new BioDAOs to use for launch. This approach to launch has lower BioDAO vetting process than the auction process and therefore is suited for more experimental BioDAOs that are looking for a fast-tracked approach to launching.

The bonding curve is designed such that BioDAOs will only receive funding upon successfully reaching the graduation valuation, where they will remain on the bonding curve until this occurs. Upon successful graduation, the BioDAO tokens will become tradeable on an AMM.Liquidity MechanismOnce a BioDAO successfully completes its fundraising process, it migrates to an AMM where is it freely tradeable. The pool is seeded using the initial BIO swapped during the curation phase, as well as some portion of the BioDAO token supply. The BioDAO will earn fees on this position to contribute to continuous funding.The Bio Protocol is also able to supplement liquidity, provided BIO token holders vote to do so. The Bio Protocol will also earn fees on this position.

BIO Token Utility

In this Bio Launchpad design, the BIO token is used for:

1. Initial BioDAO curation, allowing BIO token holders to gain first access to a new BioDAO, while also acting as signal to determine if a new BioDAO should gain access to the fundraising mechanisms
2. AMM liquidity, the BIO tokens used in the curation process will be used for AMM liquidity after a successful fundraising process. This means that all BioDAOs that launch via Bio Protocol will have liquidity positions denominated in BIO.
3. Governance, BIO token will govern Bio Protocol’s participation in liquidity provisioning across the ecosystem.

BIO Protocol Revenue

The Bio Protocol will accrue PoL via:

1. Launchpad ownership: An initial % ownership of all BioDAOs that successfully fundraise using the Bio Launchpad. This ownership stake can be used for BioDAO/BIO liquidity pairing in an AMM, provided a successful DAO vote.
2. Bonding Curve fees: Fees earned from BioDAOs that use the bonding curve fundraising mechanism.
3. AMM fees: Fees earned from Bio Protocol’s BioDAO/BIO LP positions, as well as BIO/ETH and BIO/SOL liquidity positions.

The protocol will use these fees to facilitate liquidity and funding across the ecosystem of BioDAOs.