LockTrip Blockchain | 4. LOC Demand

This is part 4 of the LockTrip Blockchain series. Read the third part here.

In this post, we will discuss the benefits of the LockTrip blockchain in terms of creating additional demand for LOC.

Generating demand for LOC was always one of our key requirements when designing our project. This is why we actually built the whole system around LOC, rather than to simply add it into an existing model.

We have outlined the basics of the key fundamental demand generator here.

In a nutshell, every booking executed on our platform (regardless of the payment method) will be converted into LOC and then locked in the booking smart contract until checkout. This basically means that those LOCs are taken out of the circulation for the period between booking and checkout.

You can observe this in the current situation, where more than 54,000 LOCs are stored/locked in the booking smart contract:

LockTrip (LOC) Token Tracker

Here is a screenshot of it (as of October 26th 2018):

This is a great proof of how the mechanism reduces circulating supply. Those LOCs will be released by the smart contract once the customers check out of their rooms, but new bookings will refill it again at a similar rate.

The higher the booking rate, the more LOCs will be out of circulation.

Net demand for LOC (generated through this mechanism) exerts an upwards pressure on the price. This concept is very unique and makes LOC a true utility based economy.

With the LockTrip blockchain, another major demand generator will be added to the equation.

LOC Demand from Staking

Staking will be the heart of the LockTrip blockchain and power the economy. It will redistribute the mining fees back to the LOC owners instead of giving them away to (mostly) project agnostic hardware miners.

Depending on the amount of LOC coins staked, this can generate a significant passive income for LOC holders. The more LOCs someone stakes, the higher the passive income will become.

There are 2 ways how this will increase the net demand for LOC.

1. Existing owners will be more hesitant to sell their LOC holdings due to the passive income they receive and the added long term value they see in this feature → Fewer sellers reduce supply
2. A completely new investor basis specialized on staking rewards will be attracted to LOC. Those can be characterized as long term holders that are much less focused on price speculation but more interested in growing the transactional economy → More buyers increase demand

Reduced supply + Increased demand = Strong upwards pressure on the LOC price

So we now have two main demand generators that can be stimulated independently from each other and will result in a greatly enhanced combined upwards pressure.

The first demand generator will be stimulated by increasing the value of our marketplace (resulting in higher booking rates) and attracting other marketplaces to connect directly to our DAPP (which will further increase booking rates and lock out even more LOCs).

The second demand generator will be stimulated by attracting other projects to our marketplace (launching/transferring their tokens to our blockchain) and profiting from the transactional economy they will create. In addition, booking transactions from our marketplace will also be a major factor here.

Those two will be pushed simultaneously, which will then result in a competition between stakers who need LOCs to build a passive income and customers who need LOCs to execute bookings on the marketplace.

While it is difficult to estimate which one of the two drivers will be more dominant in the long term, it is out of question that both will add great value and complement each other.

What do you think? Let us know in the community chat!

New to this series? Read part 1–3:
Part 1 — Marketplace Marketing | Part 2 — LOC Liquidity | Part 3 — Gas Requirement

LockTrip is the first marketplace with 0% commission where you can save on average 20% on your hotel and rental bookings compared to anywhere else. Learn how to buy LOC tokens to enable access to our marketplace and its lower prices here!

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