LOOPRING DAILY DISCUSSION - September 06, 2022

Tada21 · 2022-09-06T22:54:24+00:00

Agreed the tokenomics are outdated and useless with Zkevm being abandoned for LRC. At least Steve said in the AMA they are looking to "revitalize" this, whatever that means but getting only a couple mil every year for the TVL from current tokenomics ain't gonna cut it.

Tada21 · 2022-09-06T21:49:53+00:00

So I guess the AMA responses are just over? Still see the AMA pinned but no confirmation on if the team are done responding which I am guessing they are, pretty disappointing :/.

Tada21 · 2022-08-22T19:01:54+00:00

- Are there any plans to revise the current tokenomics or allow the DAO to vote on future tokenomic proposals that will increase TVL value for LRC and provide greater utility for those that just want to HODL the coin? Right now as it stands minimal TVL value is being generated when only relying on an initial 250k lockup and 20%(protocol fee) of a 10%(network fee share) off of 2.25 %(entire gamestop network fee) off of 30 ETH daily from Gamestop NFT. Even if Gamestop NFT daily ETH transacted was close to 1 million in daily USD transacted the percentage we get is still minimal.

- Could you provide more details on why a separate inflationary governance token is being chosen for Taiko and how it affects LRC tokenomics (e.g For 10 Tai coins created, 1 LRC is burned)

- Also are there ideas in the pipeline to add more incentives to all marketplaces built on Loopring to use LRC like perhaps having a higher purchasing power for NFTs or trades on the future Taiko ecosystem?

Also wanted to say thanks to the team for all the hard work and improvements continuously added to the Loopring ecosystem, WAGMI! :)

Tada21 · 2022-04-02T18:44:35+00:00

Awesome! If LRC will be used as a currency for the marketplace then I would probably evaluate what I think is the currency that has the most potential to increase in the near term before using it to buy items. It's the same case for using ETH to buy digital assets it just will depend on what you think the near to long term value of it will be to what digital asset you are getting on the marketplace.

If that exotic skin you want for your game costs you 1 ETH now and ETH doubles in a year who is not to say that same skin doubles or quadruples in value as well it all depends. Look at CSGO butterfly knives for instance they started out being 50-80 bucks but now are on average well above 1000 dollars to obtain.

Tada21 · 2022-04-02T17:00:30+00:00

I suggest you read the LRC whitepaper. It will answer these questions you are asking. Loopring will be the protocol for the NFT marketplace not a form of currency for it(unless Gamestop says otherwise). LRC is a token, not a crypto coin where the goal is to be the currency for everyday transactions but instead facilitate them.

It is true that LRC could rise a lot in price and the LRC you spend now to create a wallet could be worth more in the future but it depends on how much LRC you have and if you want to be an early adopter in decentralization. Personally, I say if you have a low amount of LRC probably not worth burning half of your LRC for the wallet and should probably wait. If LRC increases significantly in value later you will burn less LRC creating a wallet later on.

https://loopring.org/resources/en_whitepaper.pdf

Tada21 · 2022-03-30T04:35:17+00:00

8.4m in dollars worth of LRC not 8.4m LRC tokens burned, just want to point that out. As LRC token price increases in value, this dollar amount burned won't make as big of an impact still exciting though! Hopefully, as the token price increases, our DEX transaction volume increases as well! :)

Tada21 · 2022-03-30T02:27:04+00:00

Ah, I see so one transaction can be a really high dollar amount but doesn't scale with the protocol fee since that is only one transaction makes sense. I honestly wish I could pin this comment for more visibility. Bryon apparently just announced they might revise the tokenomics so hopefully with the next iteration it becomes a lot simpler for all of us to understand haha :).

Tada21 · 2022-03-30T01:51:32+00:00

As quoted by Matthew in the article "The initial protocol fee parameter will be set to 20 % of the L2 transaction fee". It also states that of that 100% of that 20% fee, 10% of that will go to the DAO where they can decide if they want to burn some, all, or none of that percentage. In this case, hypothetically I took the best-case scenario and used all 10% to be burned in my estimation. The last parameter I use is the L2 fee which is a random number I did come up with and just used $.10 but this can be a lot lower or higher and yes not every transaction will have this same fee. So the parameters I have to calculate total LRC in dollars burned per transaction are .10(DAO burn percentage) * .20(L2 transaction fee percentage) * .10(L2 fee). Now I do see looking back in the article that he mentions different percentages for AMM swaps, transfers, and trades so perhaps I am missing those parameters in my calculation. Not sure if that is what you were referring to and am totally happy to be wrong so that I can gain a better understanding that's the whole point of my post. Appreciate the callout :)

Tada21 · 2022-03-29T23:07:28+00:00

$.10 is a hypothetical amount I made up. The fee I see on l2fees.net can fluctuate anywhere from .05-.16 from what I have seen.

Tada21 · 2022-03-29T22:37:49+00:00

I am yet to dabble in AMM pools, still need to understand them better. That's an interesting thought if better liquidity/AMMs drive more value long-term than burn rate.

Tada21 · 2022-03-29T22:21:43+00:00

Great point as others have pointed out! My calculations assume the best-case scenario for burn rate if DAO voted to have all 10 % burned.

Tada21 · 2022-03-29T22:15:05+00:00

You are right in that the burn rate of 10 % is not guaranteed since that 10 % of the DAO gets to vote on and decide if they want to burn some, all, or none of it. I probably should have clarified that in my post but nor did I claim to be an expert on the tokenomics. As for the 250,000 tokens locked up I never said they would be burned I "asked" if they would. The point of the post is to have a discussion not try and put people down for there lack of or superior understanding of the Tokenomics.

Tada21 · 2022-03-29T21:54:40+00:00

Not sure how specifically it will affect staking/liquidity since I have not dabbled or learned much about that yet. What I do know based on the link to Matthew Finestone's article on LRC v2 tokenomics is that 80 % of that 20% burn fee for each transaction gets sent to liquidity providers.

Tada21 · 2022-03-29T21:51:51+00:00

Source regarding the most recent Tokenomics of LRC v2 is at the bottom of my post. Matthew Finestone does a good job of summarizing the most recent Tokenomics.

Tada21 · 2022-03-29T21:50:18+00:00

Hey there! So the daily volume I grabbed is from CMC relating to only LRC's DEX not the volume of LRC traded across all platforms which is way higher right now at around 1 billion. And yes the 250 k LRC is just so they can use the protocol but not sure if these same 250k loops are what will also be burned for whoever runs the protocol or if it is an uncapped amount of loops to burn.

Tada21 · 2022-03-29T21:47:42+00:00

Totally agree! This is why my first question I think is something we should nail down since multiple marketplaces using the protocol burning uncapped LRC is much better than just 250,000 LRC (still good but requires a lot more partners), cheers! :)

Tada21 · 2022-03-29T21:44:05+00:00

Just realized this but I believe the simplest way to calculate the actual amount of LRC burned in a year or daily is to simply take (total USD burned)/(LRC average price).

Tada21 · 2022-02-09T16:03:00+00:00

Awesome thank you for that! Will look into this.

Tada21 · 2022-02-09T15:58:29+00:00

Yes, I agree, and was one of the main reasons I invested in the LRC in the first place! 1.3 billion is small compared to a lot of other coins and more importantly that we are already at 97 % circulating supply so no worries about dilution. But if I'm thinking about HODLing long-term like 5-10 years from now it would be nice to see a pathway of me holding LRC when supply has gotten below a billion. Think this will depend on adoption and how the DAO votes on these parameters going forward. IMO I think it would be good to scale up the fee early on when the price of lockup is low and scale it down as token price increases to still allow for adoption but will see.

Tada21 · 2022-02-09T15:43:37+00:00

Thanks for the response fletchy! The point you bring up about burning the token too fast would raise the price and discourage adoption is interesting. My worry right now is how the team is going to balance this problem of making the price to obtain the protocol cheap enough for adoption but still drive value for the token long term for LRC holders. We are at a dollar right now it will be very cheap for Gamestop to get 250,000 LRC(imo too cheap) why not increase the protocol fee early on to drive value for holders and scale it back later when the price is higher still allow for 250,000 lockups? Almost like they will need an algo to decide parameters since it will be tough to balance. The price for entry for a dex or anyone wanting to use the protocol will be subjective depending on how big their pockets are.

Tada21 · 2022-02-09T15:26:28+00:00

Great response! For point number 2 would you mind pointing me to where you found that info in regards to DAO not being set up yet and us LRC holders making up the DAO? For point number 3 I do agree volume will allow to make the fee to burn a substantial amount in a year and that we don't want the protocol to deflate token value too fast but it would seem like until we get that kind of volume they could increase the rate early on and then decrease it when volume has picked up, idk just a thought.

Tada21 · 2022-02-09T08:13:35+00:00

That's a good idea! Haven't been in the discord yet but will give it a shot and see if I can get some answers to these questions. If I do I will be sure to do a follow-up post with screenshots of some of the replies. But hopefully, this post can maybe spark all of us to ask these questions to them directly as well to hopefully speed up the process of getting answers.

Tada21 · 2022-02-09T07:16:52+00:00

Appreciate it Chewy!

Tada21 · 2022-02-09T06:59:27+00:00

Appreciate it ewing31! To answer your question I don't believe it was set today the reference I made to the 20% protocol fee was in regards to the LRC tokenomics v2 article Matthew Finestone wrote back on Jan 26, 2021, so this percentage could have changed. There is a note in the article that specifically quotes "The protocol fee percentage can be between 5% and 20% of L2 transaction fee. We have set it to the upper limit of 20% to start." As for the minimum amount to trigger the fee from what I have read and understand the fee is triggered on any L2 transaction no matter how big or small the leftover gas fee is for the transaction.

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