Tokenomics
LKV Token
The Lokaverse platform use stablecoins (pegged to $) as the primary means of payment for buying and selling Fractional Mining Hardware (FMH) NFT and other services on the platform.
The Lokaverse token ($LKV) used as a means to incentivize participation and engagement with the platform through the rewards program.
Objective:
Creating flywheel to attract users and to extract future value of the platform transaction & sustainable monetization for the platform.
Background
$LKV Token inspired by Looksrare https://docs.looksrare.org/about/looks-tokenomics
LOOKSRARE tokenomics has been proven to attract massive users with the incentives mechanics. However the positive flywheel quickly became negative flywheel after the hype is over. See https://cobie.substack.com/p/incentives-structures
Lokaverse has the potential for this but in a more sustainable manner, since the the business model generates "real yield" from bitcoin mining activity.
LOOKS stopped rewarding their native token after 720 days and this seems became the loophole for sustainable business since the users are losing their incentives gradually.
We're applying LOOKS tokenomics on the first phase paired with burn mechanism, and move to dynamic supply with deflation bias on phase 2 (after 720 days), whereas:
The mechanics of LKV after phase 2 commenced ensure 2 things:
Momentum
Burn happens every transaction (first mint & secondary sales), but supply emitted slowly overtime. Every transaction will create demand shock momentum since it will absorb and decrease $LKV from circulation.
Deflationary Bias
Total supply increase after phase 2 is max 5% of FMH value released slowly in period of 3 years Total supply decrease is at least 2% of FMH value (if no secondary sales happens) and 2% of FMH mining yield each distribution (happens every 24hours) The higher bitcoin price, the more $LKV burned and it gives more value to the holder.
LKV Tokenomics
Phase 1 — first 720 days after launch
Fixed cap supply 1B token maximum with burn mechanism.
Allocation :
75% to community
12% airdrop
43% FMH staking reward
20% LKV staking reward
10% founding team
10% Dev Ecosystem & Marketing
3.3% strategic sales
1.7% liquidity
Release schedule looks like $LOOKS
Buyback & burn
2% of FMH mining yield (BTC —> USDC —> LKV —> burn)
Phase 2 (after 720 days)
Dynamic supply with issuance & burn mechanics with deflationary bias. The total issuance & burn is net zero on a static btc price, but deflationary when Bitcoin price increase.
Supply/Release mechanism
5% of FMH price value in $LKV calculated on mint Distributed linearly decreasing for 3 years to FMH stakers
FMH can be staked to get $LKV yield after it released with multiplier 5 for freshly minted FMH to incentivize sold out early (exponentially decrease to multiplier 1 after 14 days)
Stopped getting $LKV after 3 years, even though FMH is still active receiving bitcoin yield until cost of electricity > net bitcoin yield
Buyback (and burn) mechanism
Every FMH transaction: 5% reward allocation to community
2% will be used to buyback and burn $LKV for buying pressure
$USDC —> $LKV —> burn
Every net bitcoin yield distribution from FMH will be taxed 2% to buyback & burn $LKV
$BTC —> $LKV —> burn
Target yield for bitcoin mining is 30% APR from FMH mint price — it means that 2% from 30% = 0.6% per year burn (on static price)
5 years burn (estimated hardware lifetime) equals = 3%
The higher btc price will result in higher burn rate, thus make positive correlation on the LKV price
inflationary/deflationary projection relative to each FMH release
Users Incentives
The incentives is optimizing the best possible scenario to boost short term virality for the platform so we can expand quickly, and long term sustainability so that any participants will be benefit from the ecosystem even if they joined later.
Tax & Allocation
Users Reward & Allocation
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