# Launchpad

`pylon-protocol/launchpad` contracts define launchpad logic used for Pylon Investment Pools and Pylon Swap.

* `pylon-protocol/launchpad/lockup` contracts wrap around `pylon-protocol/core/pool` contracts, by accepting UST but locking DP tokens released within the lockup contract until a pre-set expiry period has passsed. This only allows depositors to claim back their deposits after the given lockup period.
* `pylon-protocol/launchpad/swap` contracts define a virtual AMM, of which:
  * all UST entering this pool is locked within this contract, and returns PROJECT tokens at a fixed ratio after minimum lockup period have passed.
  * **if traders try to reclaim UST before the lockup period**:
    * define `max_swappable`
    * define a virtual Uniswap-like AMM mechanism, whereby:
      * liquidity given equals `max_swappable`. for instance, if `max_swappable` is given as 5M, there exists a 5M UST - 5M PROJECT virtual AMM pool.
    * any PROJECT accepted by the swap pool is burned, but internal accounting logic treats them as a swap rather than a burn. For example:
      * Alice wants to swap her 1M vested PROJECT back to UST. Assuming that no one else have swapped beforehand, this will result in:
        * a virtual balance increase from 5M PROJECT to 6M, and an effective balance decrease of 1M PROJECT.
        * approximately 0.83M UST is returned to Alice instead of the initial 1M deposited (calculated as: `5M - { 5M UST * 5M PROJECT / (5M + 1M) PROJECT }` UST ), resulting in a 0.17M UST loss in total for Alice.
        * virtual AMM state is updated to: 4.17 UST - 6M PROJECT
      * If Bob were to swap another 1M vested PROJECT back to UST, Bob would receive 0.6M UST, resulting in a 0.4M UST loss in total for Bob.

{% hint style="info" %}
Pylon Swap is designed to exponentially decrease PROJECT token prices as more traders reverse-swap, exponentially penalizing traders attempting to withdraw before lockup period expiry.
{% endhint %}

{% hint style="danger" %}
All tokens reverse-swapped on Pylon Swap will be **permanently burned**. 
{% endhint %}


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