Price Discovery of $PLF

In order to reduce price manipulation and to have stable liquidity at launch, PulseFinity has implemented a new price discovery method inspired by Elrond, in order to have the best launch possible.

PulseFinity: Price Discovery Explained

During the price discovery phase, investors will have the opportunity to place their tokens into a smart contract using either PLS or PLF. The PLS/PLF ratio will be determined according to the amount of tokens deposited in the smart contract at the end of this stage.

When this phase concludes, those who deposited PLS will receive locked PLF tokens, and those who deposited PLF will receive locked PLS tokens based on the PLF/PLS ratio at the end of the phase. This guarantees that all parties will have exchanged their tokens at the same price that was determined during this phase.

To discourage short-term speculation and promote long-term participation, a locking mechanism will be applied to the resulting tokens for a period of approximately 2 days after listing.

The price discovery process will be divided into four distinct phases:

Phase 1: During this phase, buyers of PLF can deposit PLS and sellers of PLF can deposit PLF tokens into the smart contract. As the number of tokens in the contract fluctuates, the new price will be updated based on the PLS/PLF ratio. Withdrawals will be permitted without penalty during this phase.

During this phase the price discovery smart contract will make a deposit of 200 Million PLF tokens, which represents 100% of the tokens allocated for liquidity purposes.

Phase 2: Similar to Phase 1, deposits will be allowed but withdrawals will now be subject to a gradually increasing penalty, starting at 0% and reaching up to 5%. This is to prevent manipulation of the price by those who deposit large amounts of tokens, only to withdraw them at the last minute.

Phase 3: Deposits will no longer be possible, and withdrawals will now be subject to a fixed penalty of 10%. Penalties accumulated in Phases 2 and 3 will be retained in the smart contract and will contribute to the final ratio.

Phase 4: The price discovery phase will end, and the PLS/PLF ratio will be established. Deposits can no longer be withdrawn. Participants in the price discovery process can now redeem their purchase as locked tokens. These locked tokens will not be tradable for 3 days following the end of the price discovery phase in order to minimize volatility and potential manipulation. However, they can be added as liquidity.

At this point the price discovery smart contract will receive locked-PLS tokens from its 200 Million PLF deposit. The locked-PLS tokens received are at the ratio of the discovered price.

Adding Liquidity

In the following phase, holders of the recently locked-PLF and locked-PLS tokens, as well as holders of regular PLF and PLS, will have the ability to add liquidity at the PLS/PLF ratio established in the preceding stage.

The price discovery contract will be the first to add liquidity at the discovered PLS/PLF ratio using the remaining 50% of the PLF tokens allocated for liquidity (200 million) and the locked-PLS tokens it received during the price discovery phase.

Adding liquidity after the price discovery phase greatly reduces impermanent loss for initial liquidity providers and provides a more solid starting point for the token to make its trading debut.

Trading Begins

Once the price discovery process is completed and liquidity is provided, trading can begin. It's worth noting that in the initial phase of trading start, traders will receive tokens that are locked for ~3 days. This is to provide an opportunity for long-term supporters to engage with the token, while discouraging speculation.