Demystifying the LOOM Token Supply
Recently the LOOM token attracted more interest than usual, so we’ve seen a few questions about how the multi-chain LOOM token works across Ethereum and BSC. A couple of weeks back we posted a thread on X/Twitter to clarify some of this information, if you haven’t read it yet now would be a good time to do so. This article is a follow-up to that thread, and we’ll be looking specifically at how we obtained the 1.3 billion total supply number mentioned previously.
The Multi-Chain Token
The LOOM token was initially deployed on Ethereum as an ERC-20 token, later on, in April 2021 it was also deployed on BSC as a BEP-20 token. The BEP-20 token is effectively pegged to the ERC-20 token via multiple transfer gateway smart contracts that operate on our Basechain mainnet, Ethereum mainnet, and BSC mainnet.
When a LOOM token holder deposits LOOM tokens from their wallet on Ethereum into the LOOM transfer gateway contract on Ethereum the tokens are locked in the contract and the token holder is credited with the corresponding number of tokens in their wallet on Basechain. The token holder can then stake their tokens with one of the Basechain validators, and they can also withdraw any un-staked tokens back to Ethereum or BSC. When the token holder withdraws tokens from Basechain they will receive tokens from the locked pool of tokens in the gateway contract on Ethereum or BSC (depending on where they withdraw to).
WARNING: Please DO NOT transfer LOOM tokens directly to any of our gateway smart contracts, LOOM deposits will only be credited on Basechain when you use the Basechain Validator & Staking dashboard.
Working out the Total Supply
The LOOM ERC-20 and LOOM BEP-20 smart contracts are not identical, but we’re not going to delve into the implementation details in this article, what we’ll focus on is the total supply. If you open the LOOM token pages on Etherscan and BscScan, you’ll see the total supply is 1,300,000,000 ERC-20 tokens on Ethereum, and 1,000,000,000 BEP-20 tokens on BSC. If we simply add those two numbers together that means the total supply is 2,300,000,000 LOOM tokens, right? No, not really, the math is simple enough, but the methodology is wrong.
Lets assume there exists a big whale who wants to buy up every single LOOM token in existence at any price. Assuming the whale has more than enough funding, can they actually buy 2,300,000,000 LOOM tokens? No, they can’t, for the very simple fact that in order to buy 1,000,000,000 BEP-20 tokens someone else would have to deposit 1,000,000,000 ERC-20 tokens into the LOOM gateway contract on Ethereum. If 1,000,000,000 ERC-20 tokens are locked in the LOOM gateway contract only 300,000,000 ERC-20 tokens can be bought by the whale in addition to the 1,000,000,000 BEP-20 tokens they already acquired. So what’s the maximum number of tokens our whale can actually buy? 1,300,000,000 LOOM tokens! And that is the real total supply of LOOM.
Loom Network is building a Metaverse platform backed by an ecosystem of public blockchains to allow developers to create unique Metaverse experiences with blockchain-backed digital assets, virtual items and NFT-based privilege systems. A key part of this platform is our Basechain network — already live in production, audited, and battle-tested.
New to Loom? Start here.
Want to stake your LOOM tokens so you can earn rewards while helping secure Basechain? Find out how. You can also save a bunch in transactions fees by staking LOOM from Binance Smart Chain, more on that here.
Got experience running Linux servers, and interested in running a Basechain validator node? Reach out to us in our Telegram channel and we’ll tell you all about the current requirements.
Would you like to join us in building the core infrastructure of the blockchain-powered Metaverse? We’re always on the lookout for good Golang, Solidity, and Javascript/Typescript developers, so please email us at hiring@loomx.io if you’re interested.
