Understanding a growth potential of Level Up Coin — an overview of the token model
Real price appreciation and liquidity come from usage of the token. For LUC token, which will have a variety of utility applications on Play2Live streaming platform, a rise in value and liquidity is fueled by usage of the tokens by users of the system — streamers, viewers and tournament organizers.
A growth potential of LUC is inherent in the economic model of the token. Let’s delve deep into the model to see how the token is unfolded.
Tokens circulate between three main types of LUC token holders:
- Users of the platform. Users come to P2L from existing streaming platforms (Twitch, Youtube Gaming) or esports communities.
- Individual traders and investors from the open market as well as team members and advisors
- Foundations deployed to provide routine day-to-day operations of the platform (Level Up Chain Foundation, A Pool of User Rewards etc).
A LUC token model therefore illustrates a 3-step process depicting how the tokens flow between these types of token holders.
The gateway that is tied to the platform allows users purchasing of tokens from the open market. Users exchange either fiat money or cryptocurrency into LUC via a simple and intuitive user interface. Traders, individual investors and other individuals from the open market sell their LUC to Play2Live’s gateway, which operates under EMI license. Therefore, users don’t have to create accounts on exchanges and undergo burdensome KYC process. They just need to make a few actions inside the gateway to purchase the tokens. The process of purchasing LUC happens almost instantaneously.
After purchasing LUC from the open market, users spend it on one of the 15 features available on the platform:
- Subscriptions to the streamer’s channel
- Donations
- Totalizator of eSports events
- Assigning a task to the streamer
- Tasks from the streamer to users
- Creating content on the platform
- Promotion of the broadcasts of a favorite streamer
- Betting and gambling
- Purchasing of games at partner services
- Duels between players
- Marketplace with prizes from advertisers
- Premium subscriptions
- Advertising
- Sale of badges of rank on the platform
- Peer-to-peer CDN
LUC is the only means of payment on the platform, so to use one of these features users should purchase some LUC first.
The net revenue from all the services linked to Play2Live will be collected in LUC tokens by public smart contracts. This income can further be split between streamers, viewers, tournament organizers and the platform — a revenue sharing model is implemented to distribute income between all types of the users of the platform.
A picture illustrates a simple situation when revenue is split between the streamer and the platform only. The platform received 40 LUC of ‘income’ in this situation, while the streamer received 60 LUC. The figures in revenue sharing model don’t represent a real economy of the platform, and in beta release proportions underpinning a revenue sharing model will be different, however the burn rate and all other percentage will stay the same in beta.
After making a purchase, 80% of income that is earned by Play2Live is burnt (32 LUC). What does ‘burning’ the income mean? Since users exchanged tokens for some services on the platform, and the platform received tokens as a reward, they can further be burnt, i.e. destroyed. In its simplest form, burning a token means making the token permanently unspendable. This “buy back and burn” system will help Play2Live decrease the total supply of tokens, and thus the number of tokens available on the market will decrease. The more the service is used, the more tokens will be destroyed: It’s a positive cycle of appreciation.
In other words, with the growth of the unique users on the platform, a value of LUC token is expected to grow. More users will execute more transactions, therefore increasing the absolute amount of tokens destroyed. This ‘burning economy’ will be the key driver of LUC value on the open market. A growth of the user base will be fueled by active marketing lead-generation campaigns, partnerships with top streamers, broadcasts of esports tournaments on the platform and other activities.
P2L will burn the considerable amount of the tokens. Think again: we bought back 100 LUC from the open market via a gateway to give it to a viewer so that he could use one of the 15 amazing features of Play2Live. Finally, we burnt 32 LUC (multiply 80% and 40 of LUC that Play2Live received as a revenue). It is huge! This mechanism ensures there will ALWAYS be liquidity for LUC on the open market, so the token is expected to grow incrementally. We won’t make additional emission of LUC. Given our plan to reach 5 million registered active users on Play2Live by the end of 2018, this is going to grow the value of LUC considerably. More users means more tokens are burnt, which decreases the number of tokens in circulation.
In the example, streamer receives 60 LUC as a form of income after the user interacted with a platform in some way. We have designed a few mechanisms to motivate streamers to hold their tokens on the platform. For example, the amount of tokens on balance determines a voting power of streamers and users — the more voting power suggests greater rewards from the Pool of User Rewards.
The remaining 20% of the revenue will be used for marketing needs, purchasing of broadcasting rights, and for creation and maintenance of three foundations on the platform: Level Up Chain, A Pool of User Rewards and Operational Fund, which will be used to keep the platform in operations.
