# Establish token floor price guarentees using KPI options

**URL:** <https://discourse.uma.xyz/t/establish-token-floor-price-guarentees-using-kpi-options/1745>\
**Category:** Eth NYC Hackathon\
**Created:** [June 15, 2022, 12:11pm UTC](https://discourse.uma.xyz/t/establish-token-floor-price-guarentees-using-kpi-options/1745 "2022-06-15T12:11:46Z")\
**Posts on this page:** 1\
**Page:** 1

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**Author:** ![Mhairi](https://yyz2.discourse-cdn.com/flex032/user_avatar/discourse.uma.xyz/mhairi/32/48_2.png) [@Mhairi](https://discourse.uma.xyz/u/Mhairi)\
**Post date:** [June 15, 2022, 12:11pm UTC](https://discourse.uma.xyz/t/establish-token-floor-price-guarentees-using-kpi-options/1745/1 "2022-06-15T12:11:46Z")

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You could use KPI options to provide a floor price guarantee for buyers of a new token during a token generation event.

> Token prices can be very spiky, especially in the weeks and months after a token generation event, so a “floor price” KPI option can reassure early buyers and smooth out trading on the lower end.

In this scenario, the buyers receive both the token and an additional [LSP token](https://medium.com/uma-project/introducing-umas-long-short-pair-lsp-financial-primitive-84596803864f) that represents a claim on some ETH, BTC, or stablecoin that the project team raised during initial funding. If the regular token price drops below a certain level, they get a bigger payout from the LSP token. This gives buyers confidence that they retain some minimum value if the token price trends downward.

This is a powerful use case that can easily be implemented using UMA’s existing contracts, which makes it a great hackathon project. It would be even more interesting if it was incorporated into a comprehensive fundraising strategy for a new DAO or protocol issuing a token, which could include success tokens, outcome-based KPI options issued to specific teams, or other clever applications of UMA’s contract systems.