# Pool Creation

Pachinko enables an initiator to create a pool for any ERC20 asset. As an incentive, the pool creator receives a share of game income.

* If an asset has already been used in a pachinko pool, then the pool creator pays a small fee in ETH to start the pool. The price of a new pachinko pool is determined by a gradual dutch auction curve.&#x20;
* If no pachinko pool has ever been created for an asset, an English Auction is required to determine the price of the pool.&#x20;

### English Auctions&#x20;

* The English Auction will determine the price of the pool, which will serve as the \`initialPrice\` parameter in the Gradual Dutch Auction calculation for all subsequent pools of that asset.&#x20;
* To start an English Auction of an asset, the user must have balances of that asset. This prevents users and bots from squatting or snipping pools of newly launched tokens.
* Fees for English Auctions are paid in Eth.&#x20;
* Users can bid for the right to start the genesis pool in the English Auction. Bids are also in Eth. Bidders must also have the asset for them to bid, so to prevent snipping.
* English Auctions operate with a soft-bid mechanism, that is, bids placed in the protected period will extend the end time of the auction.

### Gradual Dutch Auctions (GDA)

* Once an asset has a pachinko pool, subsequent pachinko pools may be started by simply paying a fee in ETH determined by the GDA curve.&#x20;

$$
P=\frac{P\_i\alpha^n}{e^{\lambda T}}
$$

* Where:
  * $$P$$ : Price
  * $$P\_{i}$$: Initial fee - set by final selling price of the Genesis Pool of the English Auction
  * $$\alpha$$ : Scale factor
  * $$n$$: Number of Pachinko Pools for the asset
  * $$T$$: Time since last pool initialization
  * $$\lambda$$: Decay constant, where $$\lambda=\frac{halfLife}{ln(2)}$$

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