Liquidity Engine

The Liquidity Engine is the economic heart of Bio Protocol V2. It's a system designed to create sustainable, long-term funding for projects through mechanisms that leverage secondary market activity. This moves away from a reliance on large, one-time raises and towards a model where a project's financial health is directly tied to its community engagement and market traction.

Post-Launch Liquidity

Immediately following a successful Ignition Sale, the Liquidity Engine automatically creates a liquidity pool (LP) for the project's new token on a decentralized exchange.

• AMM Seeding: For a standard agent launch, all USDC raised from the public sale (which accounts for 37.5% of the token supply) is paired with the project's token.

• Deep Liquidity: This process is designed to create a deep and healthy liquidity pool from the moment the token begins trading, which helps to stabilize the market and facilitate efficient price discovery.

• BIO Pool: If a project reaches its milestones and demonstrates long-term potential, a BIO/$Token pool is created to support deeper liquidity in the token.

Limit-Sell Fundraising

Projects unlock funding as they achieve and sustain market traction around valuation targets.

• A percentage of each project’s token supply is reserved to be sold gradually as the project’s market value grows.

• Concentrated liquidity is deployed at specific pre-set FDV milestones, effectively creating sell limit orders.

• When the token price reaches and maintains these levels for 2 weeks, funding unlocks.

The result: Project teams receive proceeds only when real market traction occurs, aligning incentives between project founders and token holders.

Secondary Market Fees

Another mechanism for sustainable funding is a 1% fee applied to every buy and sell transaction of the project's token on the secondary market. This fee is automatically collected and distributed as follows:

• 70% to the Project: The majority of the fee revenue is sent directly to the project's treasury. This provides a continuous stream of non-dilutive funding that can be used for research, development, and operations.

• 30% to the Bio Protocol: The remaining portion of the fee revenue is sent to the Bio Protocol treasury, contributing to the overall health and growth of the ecosystem.

The Virtuous Cycle

This entire system is designed to create a powerful, self-sustaining virtuous cycle:

1. A strong project launch generates community excitement.

2. Excitement drives trading volume on the secondary market.

3. High trading volume generates initial fee revenue for the project.

4. As a project achieves its targets and hits new milestones, additional funding is unlocked via Limit-Sell Fundraising.

5. Progress and communication lead to more community excitement, and the cycle continues.

This model directly aligns the incentives of the project team with its community of token holders, creating a powerful engine for long-term growth.