Update on Loopring’s Long-Term Incentive Program

Following our token generation event on August 30, 2017, Loopring Foundation kicked off a ‘long-term incentive program’ to motivate long-term supporters in our community. This was implemented at the following smart contract: https://etherscan.io/address/longterm.lrctoken.eth. The initial post describing the program launch can be found here.

The program allowed LRC token holders to deposit their LRC tokens into an open-source Ethereum smart contract, with the tokens being locked for 18 months after participation. The participation period lasted for 2 months. The first participant will be able to withdraw his/her tokens on February 22, 2019. This post will describe how to maximize earnings in the lock-up period and how to withdraw LRC tokens.

Rate of return

Participants can claim a total of 50,177,628 LRC in rewards from Loopring’s long-term incentive program: 50 million LRC having been offered by the Loopring Foundation and 177,628 LRC contributed by the community. Investors initially locked up a total of 65,144,894 LRC tokens, meaning there is a total of 115,322,522 LRC in the contract, with an average rate of return of 177%.

It’s worth noting that the actual rate of return for any participant will depend on the timing of their withdrawal. The earlier you withdraw LRC tokens, the lower the rate of return you will receive; the later you withdraw the tokens, the higher the rate of return.

For example, suppose that participants withdraw LRC in increments of 10,000, the rate of return of the first 10 and the last 10 are as follows:

ROI per 10,000 LRC withdrawals

It can be seen that the last person to withdraw 10,000 LRC will receive over 850% rate of return. If investors withdraw LRC tokens in units of 1000, the comparison of the rate of return of the first 10 and the last 10 will be more noticeable, and the last person will receive a rate of return of ~20x.

ROI per 1,000 LRC withdrawals
ROI distribution per 10,000 LRC withdrawals

Thus, if you withdraw LRC tokens later, the rate of return will be much higher. If investors choose to withdraw tokens when there is a remaining 10,890,000 LRC in the contract, the user’s rate of return will be greater than the average rate of return of 177%.

Participants have access to https://etherscan.io/address/longterm.lrctoken.eth#readContract, and at any time you can use the input box (depicted below) to view the actual rate of return you would receive when withdrawing the specific amount of LRC at that moment in time. For example, currently, you can receive 2,346.73 LRC reward (extra) when withdrawing 5,678 LRC. [Note: You must add 18 zeros to the end of the number of tokens when inputting the value.]

Query your actual return

How to withdraw?

To withdraw the full amount of LRC tokens you deposited, simply send “0” ETH to longterm.lrctoken.eth (or the smart contract address 0x239dE3a0D6ca5f21601f83327eA2174225eB7156).

Upon completing the transaction, the program will send your wallet address the original deposited tokens + any additional tokens earned through interest.

You must send the transaction from your wallet address that initially entered the program.

Note: We recommend that you use a Gas Limit of at least “90000” to ensure your transaction will be processed successfully. You must have some Ether in your wallet to pay for the Gas fee or your transfer will not be processed.

Partial Token Withdrawal

If you want to withdraw a partial amount of tokens, such as “N” LRC, you will need to send a calculated amount of Ether to the smart contract address. Specifically, you will need to send N/10,000,000ETH to the smart contract address.

To calculate the amount of Ether required for a partial withdrawal, use the formula below:

Example

If you originally deposited 1,000,000 tokens into the long-term program, but only wanted to withdraw 100,000 of them after 18 months, you would calculate [100,000/10,000,000 = .01] and send .01 ETH to the smart contract.

The program will send your wallet address .01 ETH + 100,000 LRC + any additional LRC earned through interest.

A piece of advice:

In general: withdraw only when you want to sell LRC immediately.

  1. Otherwise, you can withdraw tokens later than others and you will receive a higher rate of return.
  2. If you only want to sell a partial amount, then choose to withdraw a partial amount of tokens from the contract, and continue to earn on the rest.

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