Introducing: Local Ether

Local Ether
Aug 28, 2017 · 7 min read

Unveiling Ethereum’s first decentralized fiat exchange: local ether

Local Ether is a decentralized platform of exchange between Ethereum/ERC20 tokens and fiat. Local Ether makes use of the power of smart contracts to facilitate trades and protect buyers and sellers. Local Ether provides a private medium of exchange that offers incentives to those that act as administrators for dispute management, as well as holders of our native token LOC (LOCal Ether), which gives a stake of ownership to Local Ether’s accumulated network fees & governance.

LOC is a token directly tied to the functioning of Local Ether. LOC confers to holders the right to vote for changes to Local Ether such as trade fees and rewards to administrators of the network. The value of LOC is backed by the basket of tokens that are taken as network fees from trades conducted over the Local Ether platform. At any time, holders of LOC can “burn” their LOC for the respective tokens included in the accumulated network fees. While LOC can be freely traded on the market, the prices of its underlying assets give it a minimum value.

Why we need Local Ether

Exchanging Ethereum and ERC20 tokens for fiat happens on a select few platforms that are highly centralized and often require extensive KYC approval. On many platforms, prospective buyers of Ethereum and other ERC20 tokens must first buy Bitcoin in order to subsequently purchase the token of their choice. These unnecessary obstacles would be solved through a decentralized platform dedicated to ETH/ERC20-to-fiat trades.

As a user of most current exchanges, you are subject to various arbitrary requirements and limitations: you are required to hand over sensitive personal information and to relinquish control of your assets and accounts to these exchanges; there are limits to how much value you can move in or out of the exchanges over certain periods of time; and exchanges have the power to make mistakes with your funds or freeze them at will. This means you must trust the exchange and its employees to act appropriately with access to your funds and personal information. What’s more, you must accept the risk of the exchange being hacked and your funds and information stolen.

With Local Ether, you will be able to jump straight to trading, without the hassle. Users are not required to register with anything but an Ethereum address via Mist/Parity/Metamask. They are in control of the private keys to their accounts and holdings at all times. The only time Local Ether holds on to its users’ funds is when sellers put their tokens into an escrow contract while waiting for payment.

The core of Local Ether’s functionality runs on the Ethereum network and can not be taken down or controlled by any central authority such as a government, a business entity, or Local Ether itself. While a front end website is necessary for various features of Local Ether’s functionality such as browsing and creating offers, having access to various websites to access the front end means even if one domain should have issues, Local Ether is still available. In sum, your information and holdings are always in your control and as secure as you make them.

LOC: The token behind Local Ether

Governance of Local Ether, such as fees and dispute management protocol, is controlled and voted on by holders of LOC. Initially, these processes will be controlled by the founders of Local Ether, but will transition into a decentralized autonomous organization with the use of Aragon, with holders of LOC having the right to govern. It is our hope that holders of LOC will be those who believe in the project and wish to see Local Ether become a valuable contribution to the Ethereum ecosystem, as well as expect the value of LOC increase over time. We will have various crowd sales to distribute LOC and generate funds for further development of the Local Ether platform.

On top of its functional aspects, LOC is a “basket-token”. When trades are conducted over Local Ether, fees are taken in the form of the token being sold. All fees are deposited directly into the treasury. The total value of the treasury confers a minimum value to each LOC token. The value of the treasury is dependent on the market price of the basket of tokens it holds. The treasury and LOC can be seen as a kind of indexed fund seeking to maximize its value over time by storing what should naturally be the tokens traded with the most volume and growth. Any holder of LOC can “burn” their LOC and receive the proportion of fees from the treasury that correspond to the amount of LOC they hold with regard to the total supply of LOC. As such, LOC is a deflationary token, and as more LOC is burned, every LOC in supply increases its stake to the treasury. However, it is our expectation that the fundamental and speculative value of LOC will give it a higher trading price than its underlying worth, also taking into account that burning LOC destroys the right of governance. Through LOC, users stand to benefit and earn from Local Ether, as well as direct its development.

How it works

To begin using Local Ether, you must access Local Ether on an Ethereum enabled browser or a browser with the Metamask plug in. From here, you can attach a username. Local Ether incorporates its own encrypted messaging system, allowing you to communicate with your counterparty. At no point does Local Ether require your personal information such as name, address, documents, etc., to begin using the service.

You can view available buy & sell offers through the offers sections. You can create sell offers through this page as well. While certain methods of payment are location dependent (such as cash in person), others do not require physical presence. Thus, you can search not only by city, but by state or country in the location field. Offers will display users and their ratings, payment method type, location, minimum and maximum sale amounts, and the price per token. When you find an offer that suits you, a “confirm or deny” request will be sent to the counterparty. You can observe the status of the trade in the trades section.

In the Trades section, you can view the status of any open trades, and take any further actions for the trade. Once a buyer and seller have coordinated, the seller can release their funds into a smart contract. If the buyer makes the payment within the allocated time, the seller can then release the funds from escrow to the buyer. If payment is not made on time, the seller can have their funds returned. If, for any reason, there is a dispute, either party can initiate the dispute management process. Once a trade has been successfully completed, this contributes to the users’ reputations.

Users can also view the current status of the treasury. The treasury is the account to which all of Local Ether’s fees are deposited. The approximate value of the treasury is given, as well as the ability to see the specific balances of every token held by the treasury. LOC holders are also given an insight into the value they would receive if they chose to burn their LOC, as well as other LOC information such as supply and market price.

Those individuals who act as mediators to disputed trades are Administrators of Local Ether. Trades can be disputed for a number of reasons, such as honest mistakes by buyers or sellers, or genuine attempts to cheat the system. Administrators attempt to resolve disputed trades by opening communication channels via email in which participants can see all messages sent to each other. When trades are successfully resolved or closed, administrators are rewarded for their work. Initially, Local Ether hopes to reward these individuals with money raised for the LOC token sale, but in the future, LOC holders can vote to modify the way this happens, such as by allocating a share of the network fees to administrators.

Roadmap

Local Ether will launch a minimum viable product in the coming weeks to demonstrate real world use of its service. Initially, we will build a community and seek individuals that are willing to help us bootstrap offers on the market, as well those interested in acting as administrators.

In the future, Local Ether will seek to expand its functionality. We will integrate escrowed trades between diverse ERC20 tokens. We will explore innovative ways of escrowing and securing payment via traditional payment rails such as PayPal and bank transfers. And finally, with your help, we will transition Local Ether into a Decentralized Autonomous Organization via Aragon to create a truly user driven platform.

Early Contributor Offering

The total fixed supply is 823543 with 18 decimals places of precision (823543.000000000000000000) total coins. That is the result of “web3.toWei(823543, ‘ether’)”

The initial coin allocation will be as follows:

15% held between founders

10% offered to early contributors

5% offered to first admins, liquidity providers, and contract auditors.

70% held in a contract to be unlocked according to community proposals after the transition to Aragon (for voting and governance) is complete (for instance for an ICO, rewards, or another small cap raise).

We will announce more details of the early contributor offering soon.

Be a part of Local Ether

Local Ether needs your help to become a true success. Local Ether is looking for people interested in:

  • Reviewing our code and making sure the service is secure
  • Acting as the first administrators for Local Ether
  • Bootstrapping liquidity by making the first sell offers on the platform
  • Becoming an Early Contributor

Incentives for taking on any of these roles will be discussed with the community. We are also interested in hearing any general feedback about Local Ether, or questions you may have. We invite everybody to join our Slack channel at: https://loceth-comn-invite.herokuapp.com

We look forward to seeing our community grow!

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Local Ether

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Local Ether is a decentralized Ethereum/ERC20-to-fiat exchange.

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