There have been many launchpads popping up in the year 2021., and this is great news for the health of the crypto space, as these launchpads ensure there is some level of due diligence — contrary to the conditions that surrounded the 2017. ICO boom.
This has caused a number of issues, with the most burning issues being: whales buying out a large portion of these launchpads’ tokens that guarantee IDO allocations, as well as the scalability issue.
L2PAD team has performed an in-depth analysis of each and every launchpad, and devised a plan how to avoid each and every one of the identified issues, all the while rewarding the supporters of the launchpad, as well as focusing on decentralization.
The solution has been found in a VC DAO that utilizes quadratic funding, retrospective funding, dual token system and morphing tokenomics. Morphing tokenomics, or in other words — changing tokenomics is one of the key components that will enable the launchpad and its users to prosper.
Before we dive deeper into how tokenomics change over each epoch of the L2PAD launchpad, let us first learn how the L2PAD dual token system works.
Dual token system
The dual token system is based on two different types of tokens — L2PAD tokens and L2POOL tokens. The primary difference between the two is the fact that L2PAD tokens are essentially governance tokens that also enable the possibility to acquire L2POOL tokens, while L2POOL tokens are global system diversifier tokens.
In other words, this means that L2POOL tokens allow users to withdraw projects’ tokens that launched their tokens via the L2PAD launchpad, by burning the aforementioned L2POOL tokens. As the L2PAD launchpad’s aim is create a truly equitable platform — the L2POOL tokens have absolutely no private allocation or premine!
The withdrawal of launched projects’ tokens from the so-called Alpha pool, by burning L2POOL tokens, is possible because when projects launch on the launchpad, they are required to deposit a minimum amount of 30 % of the IDO pool size — in the project’s token, to the Alpha pool.
To be eligible to participate in an IDO on the launchpad, launchpad users will need to stake L2PAD tokens in the quantity that provides the user with at least the tier 5 benefits — otherwise IDO participation is not possible.
In short, this describes the mechanisms behind the dual token system, let us now delve into the concept of morphing tokenomics
Morphing tokenomics
The tokenomics of the L2PAD launchpad change over time, wherein each change is predetermined and designed with great fore-thought. These changes will address each stage of a growing launchpad — thereby avoiding all issues that other launchpads encountered.
The tokenomics changes were designed to happen on three occurrences, during a switch from one epoch to another — whilst there are 4 epochs in total which are called, in order: Pareto epoch, Markowitz epoch, Levine epoch and Szabo epoch.
Pareto epoch
The humble beginning of a new era. Private, seed and strategic investments are concluded, and the L2PAD tokens are launched via an IDO on the L2PAD launchpad.
All proceeds from the IDO are locked for the purpose of providing DEX liquidity. L2PAD tokens are distributed to IDO participants, and the remaining L2PAD tokens are locked up via smart smarts as per the vesting schedule.
Markowitz epoch
The Markowitz epoch begins with the creation of the L2PAD/ETH and L2PAD/USDC liquidity pools which will enable individuals and organizations to trade L2PAD tokens. This epoch is intended to prepare the launchpad and the community for the IDOs — and it will last approximately 1,5 months.
At the initialization of this epoch, L2PAD staking is enabled — which then provides L2POOL tokens.
The provision of the L2PAD tokens is continuous and it is required to keep L2PAD tokens staked in order to keep acquiring L2POOL tokens as staking rewards.
Another important mechanism is implemented during this epoch which is called the Anchor charge. In essence, an anchor charge is a fee that is incurred to individuals that have unstaked their L2PAD tokens — and this fee amounts to 5 % of the stake that was unstaked.
Once 20 % of the total L2POOL tokens supply is minted and provided to stakers — the Markowitz epoch ends and a new one begins.
Levine epoch
In the Levine epoch IDOs on the L2PAD launchpad finally begin! The pool origination function is decentralized and rudimentary governance systems are initialized.
Tiers for the IDO participation are also activated.
The tiers are as follows:
Tier I
16x(+stake weight) pool weight, guaranteed IDO access, DAO access
Tier II
4x(+stake weight) pool weight, guaranteed IDO access, delegated DAO access
Tier III
4x(+stake weight) pool weight, 4x(+stake weight) IDO participation odds, delegated DAO access
Tier IV
2x pool weight, 2x IDO participation odds, delegated DAO access
Tier V
1x pool weight, 1x IDO participation odds, no DAO access
In the Levine epoch, the L2PAD token threshold to acquire each tier status is defined by the L2PAD team.
At the beginning of the epoch, liquidity mining on the L2PAD/ETH and L2PAD/USDC is activated, and the tokenomics behind L2POOL token distribution is also significantly changed.
From the moment the Levine epoch is initialized — 80% of L2POOL tokens being minted are distributed in a continuous manner to liquidity miners of L2PAD tokens, whilst the remaining 20% is provided to stakers of L2PAD tokens. This will continue to be the case until the community decides otherwise — via the DAO mechanism.
Two more changes will occur at the beginning of this epoch — L2PAD stakers will be free to migrate their tokens from the staking function to liquidity token staking, without being incurred with the anchor charge, and the proceeds from the IDO will be added to the L2PAD liquidity pool!
Szabo epoch
The Szabo epoch begins when the L2PAD DAO or — L2DAO is engaged. From this moment on, the launchpad is fully in the hands of the community! Tier dynamics, IDO selection, tokenomics and everything else — are modifiable automatically, via the DAO — according to the popular vote.
Once the DAO is engaged, the team allocation and early stakers allocation are likewise distributed.
Deflationary mechanisms
The best way to conclude this informative article on tokenomics is certainly to emphasize the deflationary mechanisms behind both L2PAD and L2POOL tokens!
Firstly, one third of the previously mentioned L2PAD anchor charge is burned! Secondly, upon reaching 1,000,000 USD equivalent of aggregate funds raised, a system fee is enabled. This feature adds a small fee on top of the IDO fundraising pool and amounts to 5% of the total funds raised. The proceeds from collecting the system fee are used to buy back and burn L2PAD tokens!
As clarified previously in the article, L2POOL tokens must be burned in order to retrieve tokens that were launched via IDOs! L2POOL tokens have a finite supply of 1000 tokens that will be minted over a 10 year period — using a root function. This means that the scarcity is ensured through a small supply and the burning mechanism. Considering these deflationary mechanisms, It is certain that both the L2POOL and L2PAD tokens have very rewarding tokenomics for its holders.
