The LID team was pleased to have been hosted by @tehMoonwaLkeR for a live AMA (ask me anything) session on August 4th. Attending from the LID Team, were Carlsbad (lead Dev), Holle (COO), and Gibsoon (CMO).
Liquidity Dividends Protocol provides presale licensing and ILO certifications. ILO, or Initial Liquidity Offering, is where new tokens/projects deposit and lock liquidity raised in a presale event.
ILOs are a powerful way to rapidly develop and scale new tech, but unfortunately it has also attracted a huge number of “rug pull” scams. As many veteran and new investors are aware, rug pull scams have tainted the DEX/DeFi space in recent times. LID (Liquidity Dividends Protocol) solves this problem by providing presales that trustlessly lock liquidity in DEXs, such as Uniswap.
The key focus points of this AMA session, centred around ideas such as:
· The LID Protocol tech, and how the presale process works.
· The validity of such a project, and why the licensed presale tech is ultimately the logical next step forward for DEX project launches.
· The DAO, and how increasing community contribution through innovative ideas, will lead to better future development of the project.
· Other uses of LID, including the social staking rewards program.
· Futher finer details regarding the LID Protocol project itself.
Some AMA session live questions and answers:
So you can raise funds on Liquidity Dividends Protocol but the funds are locked and only released to certain terms? similar to the recent DYCO Orion protocol had?
Yes, but its much simpler. At the end of the presale, theres 3 things that happen, in order.
(1) A set percentage of new tokens and raised base asset (eth) are depostied as liquidity and locked.
(2) The remaining base asset and tokens are distributed to locking contracts according to a predetermined plan
(3) The presale depositors withdraw their tokens.
For the ratios, we allow teams to set their own proportions — but in order to qualify for certification, high standards must be met to guarantee enough liquidity and distribution of ownership for our partners like AskoLend.
i like this alot, but why do we need a protocol for this? wouldnt it be possible without? how can we prevent “soft exit scams” with this, what happens when devs dont continue the work?
We need a protocol because most investors don’t have the time or technical ability to verify each and every presale contract. There needs to be a trusted system for registering certifications and generating presales.
LID’s core tech doesn’t stop soft exit scams, we’re really focused specifically on scams related to liquidity. That said, for the top level certifications, we do vet the team, verify they’ve created something innovative, and are likely to continue work into the future. But even just stopping liquidity exit scams is a big step for the community.
I suspect that our self service portal will make soft exit scams more of a concern — essentially, any new, small, unknown project will have no excuse to not have a trustless presale. But that’s thinking a couple steps ahead into the future, we need to stop the bleed from liquidity scams now.
“verify they’ve created something innovative”
so basically hosting icos on LID is already kind of a seal of approval? very interesting
what else can you do with Liquidity Dividends Protocol?
Its not quite an ICO, because theres automated allocation of assets, and most assets are allocated to liquidity (top certification requires 75%+ of base assets to be locked as liquidity)
The other aspect of LID is the “Dividends” aspect. We’ve designed and are building out a better staking system with governance farming, where stakers are rewarded for actively voting in the Lid Dao.
This proved to be the start of a very indepth AMA session. Amongst those ideas discussed, were some of the following. The LID DAO innovation ideas came about due to the current weaknesses and downfalls of existing DAO setups. With the Liquidity Dividends Protocol DAO, stakers of tokens are rewarded for actively voting in the LID DAO. As pointed out by our lead Developer Carlsbad, the idea of swarm intelligence isn’t wrong — it is simply the implementation that is flawed. The theory behind DAOs is “Wisdom of the crowds”, so if just a few voters participate, the core concept is flawed.
Incentivizing participation is just one way we can solve some of these issues. The LID Protocol social rewards staking structure is powered by our bootstrapped dividend system from transfer tax. These dividends come from token transfers and Uniswap sells. In the long term, rewards are going to come from licensing fees from LID Certified Presales. These fees are deposited into the LID DAO, which will be controlled by LID Stakers. Stakers can then vote to spend these resources how they like — reinvesting in tech, buybacks and burns, or additional dividends.
The Liquidity Dividends Protocol is really focused on that initial presale phase — after that point, LID will be doing some basic monitoring to ensure projects don’t disqualify themselves from certification.
The DeFi space is a growing industry — what’s lacking is better security, better safety against scams, and more platforms that are open to a wider variety of assets. DeFi is definitely the future — with Liquidity Dividends Protocol set and poised to transform this space, ensuring a safer investor environment; the future of DeFi will be world-changing. LID will be a go-to point for everything presale. From security to audit, research and due diligence, liquidity provision and much more; Liquidity Dividends Protocol will be there to transform the presale process — for the better.
Liquidity Dividends Protocol was created and started to end scams, through its tried and tested licensed presale tech all the way through to monitoring of future licensed projects.
The Liquidity Dividends Protocol Dream
“Our dream would be to see a complete end to exit scams. This would mean a high percentage of projects choose to do LID Licensed presales, and those that don’t, use other presales that allow LID to easily issue certifications. Our dream would be that investors demand more from developers and aren’t willing to just give funds to anyone who posts their address and claims “its a presale”. We need higher standards.” — Carlsbad
As mentioned previously, Liquidity Dividends Protocol addresses a specific type of scam, the “rug pull.”
In this scam, the developers raise funds in a presale claiming they will lock liquidity into Uniswap. After depositing liquidity, investors buy up the tokens from Uniswap. Then, the scammer withdraws the liquidity instead of locking it.
LID presales stop this type of scam by;
· Trustlessly burning liquidity pool tokens the moment they are placed in Uniswap. This is in contrast to say UNC and other liquidity pool lockers which puts the pool tokens into an Smart Contract where they could be withdrawn later. We burn the liquidity pool tokens permanently.
· Certifications with requirements for time locking and ratios; we dont allow projects to have more than 5% of tokens available post uniswap launch, so even if the team wants to dump, or a team member defects or has a fallout, they can’t do much damage to the project.
This is appealing to developers for a few reasons:
· They dont have to develop their own presale tech.
· They get access to the LID community (which is fantastic!).
· They can retain anonymity without causing fear of exit scam. (As Gibsoon put it, “Codes over words. The Smart Contract, other products, and the tech will speak for itself, without having to rely on a face.”)
· They get access to the ecosystem of DAPPS that require LID certification, like AskoLend
A public commentor on the AMA asked a brilliant question, one of which was a standout:
“So how long do you think it will be when it becomes common place to look for projects secured with LID just as one would check the chart or liquidity. I guess my question is, when is the team hoping to achieve household name status?”
That is exactly the goal of Liquidity Dividends Protocol. We want to function as a better, decentralized version of the traditional finances ratings agencies. LID hopes that what we’ll see, is an array of certifications, for various aspects of a project. These certifications will be built upon the cornerstone of any project — that being presale fund raising, and locking of liquidity certification, provided by Liquidity Dividends Protocol Licensed Presale Tech.
All those of the LID Team and the wider LID community would like to thank @tehMoonwaLkeR for hosting us for a great AMA session. It was fun, with a lot of very detailed, intelligent, and even pointed questions.