LizCoin discussion

General discussion around LizCoin should be kept in this thread, full details on current LizCoin tokenomics can be found here Lets Talk Staking - Google Docs

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Thank you Dupree,

very clear document.

minor detail of my background. I am a core contributor in a bridging project and have been a contributor in a DeFi project (all hail DeFi summer), the latter of which had unlimited token supply and burning mechanism. I also regularly advise on tokenomics for starting projects.

To me personally, and this is a very personal opinion, we have no business releasing a token. Surprisingly for the reasons mentioned in the document itself. Whilst it is a good way to create liquidity (usually for the team and early investors) it devaluates the ETHlizard NFTs.

We already have a very clear and defined value for those, with increasing utility. Adding a token means you would be forced to take away some or a large part of that utility and implement that into your token to make it valuable. Of course, this will lead some in the community to burn their ETH lizard to gain more token, but the reality is that it will be prone to extraction at a higher pace, slowly draining the project. That will create dissent, unhappiness, FUD etc. etc.

Having a limited amount of ETHlizards means that the value will always remain within that group. People can accumulate, but even when they choose to liquidate their holdings, that will not impact the project as a whole, it would even benefit it via royalties.

Then last but not least, regulation is a B… With NFTs as long term assets most of us are safe from tax authorities and ex wives. Personally I’d prefer to keep it that way. Though my taxes are quite easy being in EU, crypto tax in the US is a night mare as I understand.

Just my humble opinion based on personal experience

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My personal opinion is that we don’t need a coin.

Let’s stake the NFT in the Dashboard. The longer you stake your LIZ NFT(s) the bigger the piece of the investment rewards cake. Whenever the DAO liquidates an investment, the funds are claimable by all staked Liz NFT holders for the % they are entitled to.

Creating a coin would overcomplicate things, where would the value lie in; the Liz NFT or the Liz coin?
One of the 2 would lose in value.

Also from a legal side of things, seeing as this is something that comes up; Handing out ETH directly or any other coin is basically the same thing from my POV.

I would like to thank the team for the work and opening the discussion.

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Personally I would stick to the no token party as well in this case. I don’t see the value for a token. The value accrual tied to the DAO demand should go to the NFT.

IF we chose to do a token later down the road then so be it but currently I am fully against it.

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Before formulating any opinion, I would like to see a more complete tokenomics analysis based on the discussion the team had with all the advisors. Is it possible to have a model of it, with a couple of graph showing the interaction between the NFT, the investments and profit distribution, the Coin and potentially the outside market?
I’m sure a great deal of thoughts went into this, and I don’t think we should dismiss the idea based only on the information in the staking document, as I think it might not be representative of the pros and cons of the system they are trying to achieve

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Whilst I lean towards no token at all, reading the document has made me consider that there are benefits. I agree with SeaGolem above though - this must not be rushed. I also would like to see more detail about:

  • a possible max supply
  • how DAO investment profits would actually be converted to LIZ to then be distributed
  • how the DAO would go about having some protocol owned liquidity
  • what the biggest drawbacks would be, in the team’s view, if there was no token and we instead just kept track of rev % rights through non-transferable NFTS/poaps/points/weighting over time staked

I worry greatly about:

  • having the NFT itself being de-valued
  • the “throwaway” feeling of a token (even the name is not very appealing) as opposed to the very exclusive nature of the 5050 NFTs
  • whether a token would be able to hold value - I suspect it would struggle - and this contrasts strongly with the appeal of earning passive revdis in ETH or USDC
  • whether the number 1 motivator of a token is to help the team with $$ for a runway to work?
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Yeah, I’d also agree with this. Initially, I don’t quite understand why a token is useful or necessary here, but understanding what the advisors had to say and, maybe, who they are, would be good.

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Can the team please also more fully explain how this part would work:

" **Fully eliminates any staking contract risk of losing ETH, as all ETH remains in the Ethlizard Vault backed by $LIZ; (thus rendering us less vulnerable to attacks / hacks - as the DAO has the ability to fork in the event Lizcoin is compromised"

I am not seeing large differences in safety.

Option A:
Lizards are staked; ETH is in vault; profit ETH is then periodically sent to a separate address to be claimed. But our ETH is still always sitting safely in either the vault address or a claim address.

Option B: Lizards are staked; profit ETH is in vault; at some point that profit ETH needs to be used to market buy $LIZ (carries its own complications and risks) - that LIZ is then sent to a claim address.

How is B markedly safer than A?

And moreover, how is the ETH in the vault being “backed by” $LIZ, when we we have no idea what price LIZ would be trading at, and even if $LIZ went to zero, the ETH would still be ETH - it’s not clear how anything was backing anything else (as backing would imply the guarantee of being able to exchange and always maintain value).

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The team is yet to clarify whether stakers would even have to sell their LIZ into an LP pool for ETH.

I have seen mention of being able to “claim” your due ETH with your LIZ, i.e. that somehow its value in ETH would be assured through the staking platform. Would like to see comment on this from the team.

What strikes me most at this stage is:

  • having a $LIZ token is a momentus and irreversible decision (especially when it is connected into revdis and governance, hence encroaching on the space held by the NFTs themselves)

  • timing matters - so even if a token was to one day exist, the question of WHEN is very important

  • it is thereotically quite easy for the team to set up a staking solution, at least for now, that does not require a token at all and which can still track our respective staking times and claims on future revdis.

And so, for me, it seems comfortably the most sensible move to hold off on any token for now, unless these is a compelling reason for it to be done soon. Such an approach would still allow for the NFT staking to be set up and for the DAO to mature, buying time for more planning and discussion, and letting the launch of any future token become quite a strategic move that is done with timing and impact in mind.

Hello,
I’m not a crypto expert but the Lizard utility was like really simple to understand before all this.
We split revenue between 5250 Lizard value (with genesis ones). The utility is attached to the NFT that create good Opensea fee revenue.

With coin : We remove the utility to the lizard, Nobody care about to buy it or we have to burn our precious ones. So our identity just disapear to get more token for more money (All will burn the lizards and lizards won’t exist anymore). It mean no more revenue from Opensea trades. only tokens.

Perhaps I’m a noob in math but I will do a table that compare the actual distribution to the futur:
Actual (Simplified):
Team : 15% Revenue
Council : 5%
Lizard : 80% (40% for reinvest)

LizCoin:
Team : 15%
Liquidity reserve : 10% wtf?
Lizard (Snapshot + Burn) : 30%
Stacking Rewards (OVER 5 YEARS) : 45%

So What I understand, from the lizard side, is that we will have to wait the end of stacking rewards (In 5 years), to have 75% of the DAO Coin. And in the launch, if all lizards are burn, we will have 30% of the value when team have 15%. It mean that the team will be worth 0.5x the TOTAL of lizard.

In fact, in really long term after the unlock from every thing, it change not that much from actual. But I will ask a really BIGGER Lock to the team. Like Locked during the 3 first years and then unlock 2% every year. Why should the DAO take all the risk and loose 75% of his value to the team at the launch.

Oh and considering that all the profits are going to the Stacking rewards for lizard holders and 0 to the Team. That can’t work, Team will get another part of money from somewhere…

I don’t see good side from Lizcoin. a lot of DeFi work for nothing, We got the stacking part. Stack the NFT, then split the profit in ETH and distribute depending of the weight of staking. (You can play with the stacking lengh for the weight, more than ILV, like 1-2-3-4-5 years stacking.)
The NFT keep it value, The NFT are still traded if not stacked. We keep the NFT in our community, lowest risk to see trader that trade our NFT as they could trade a coin.

Why doing all that complicated when that can be much simple for our needs ?.
Anyway ! Thanks for the work and let’s see our bright lizard futur !

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I have nothing of additional value to add here, it’s all been pretty well covered above. I do not see the point of $LIZ coin. We should be asking ourselves WHY. Why are we doing this? What is it’s actual purpose? If it’s because it’s “trendy” and current in the market, that is not a good reason. Initial thoughts are it over complicates a system that doesn’t need complication - we have Ethlizard NFTs. They are our share in the DAO for voting AND revenue distribution.

I would like to see the rational, additional details on tokenomics and why the team/advisors think it is a good idea.

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I’ll play a bit of devil’s advocate for $LIZ…
(Dashboard looks sweet, btw)

-It’s almost certainly a regulatory decision.

-With the 10% supply used for an ETH liquidity pool, this sets up for a buyback and burn mechanism for value distribution back to $LIZ, avoiding securities law.

-While this doesn’t directly give value to lizholders (as seems to be the core issue at hand), I think it can be tastefully implemented by some of our resident tokenomics experts.

-+1 on clarity of tokenomics/treasury strategy, even if it’s currently just growth i.e. build the treasury warchest. But, long-term, holders are going to want revenue distribution. That is a

-Agreed on the longer staked = higher % LIZ allocation ideas, ala Moonbirds nesting.

Your fellow liz,
G

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Liz into an LP pool of Liz/ETH for DEX or Liz into a maker/taker pairing of Liz\ETH market for CEX.

Also they have clarified this very well in the document/proposal that I pasted below from the document:

10% Liquidity Reserves for CEX/DEX Liquidity programs

It is proposed that 10% of Tokens be reserved for Liquidity Programs on both Centralised exchanges or Decentralised exchanges. This is a ‘typical’ amount that would be reserved by projects, however this amount can be adjusted if desired.

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If a hacker exploits the contract the DAO can just fork Lizcoin, so the hacker effectively achieves nothing. If however we are distributing ETH or stablecoin and are exploited it’s irreparable.

If a hacker exploits the contract, they will get as much lizcoin as possible to drain all the ETH from the liquidity pool as fast as possible. They now have ETH and there’s nothing anyone can do about it. This is how almost all Defi exploits/hacks/bugs/ operate. So how does a FORK of lizcoin fix that issue?

Also once that happens, who would keep providing their valuable ETH into an LP pool for another possible attack? Once a token is exploited and the ETH from the LP pool is drained, that pool will never recover confidence for users to put their ETH into it.

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Hi Steve, you raise some good questions but I believe some of them are already answered in the document but some haven’t and some are more complicated. I will try and clarify that for you

*Possible max supply:

Answer: The document states there will be 5,000,000,000 tokens and they also state they will not have an unlimited supply. This will be their max cap.

*how DAO investment profits would actually be converted to LIZ to then be distributed

Answer: This is a two part answer. 1) How profits would be converted? 2) How they will be distributed?

  1. The document states they will provide 10% of tokens as liquidity to both CEX/DEX. We can safely assume that both the CEX (order book) or DEX (Liquidity pool) will be traded in ETH\Lizcoin and Lizcoin\ETH. The more pairs you have, the higher the risks because you will than need more liquidity to spread out to help the different pools.
    CEX → The DAO/account holder logs into a CEX exchange and makes an order from the maker/taker market by swapping ETH into Lizcoin. Stakers can then login to the CEX and swap their Lizcoin into ETH.
    DEX → The DAO/account holder connects to the DeFI liquidity pool and swaps ETH into Lizcoin. Stakers can then connect to the DEX LP and swap their Lizcoin into ETH.

  2. Lizcoin is distributed in two phases as listed in the document. Phase 1: 5% of total Lizcoins will be distributed to holders and Phase 2: 5% of total lizcoins will be distributed to the rest of the lizard holders. In essence, you have a “fully realized token number” per each of your lizards before the DAO performs any liquidations of ETH into Lizcoin. There is additional tokens added to your balance through staking though. So technically, you could receive 10,000 tokens for your 5 lizards and liquidate ALL of those tokens at a price of $1 and that will be the end of your journey, but you can also receive more tokens through staking (30% of total supply) for 5 years running to continue your journey of RevDis.

*How the DAO would go about having some protocol owned liquidity

Answer: The DAO protocol liquidity is 10% as stated in the document. This is for both CEX\DEX’s.

*Having the NFT itself being de-valued

Answer: @G4C_Mindya_HYPE wrote a nice comment in the governance talk regarding devaluation based on the documents proposing the 10% lizard token release and 15% founder token release. I will quote it below:

"But what I read with the actual proposition is that our lizards are worth 5% + 5% (10%) of the total Lizcoin and removing the utility from the NFT to give it to the coin? It would mean that our 5250 Lizards are worth 10% of coin, and team are worth 15% ? It would mean the team is worth 7875 Lizard during the coin distribution ?

This is exactly what is happening. Our lizard NFT’s are being devalued in the short-term while the founders cut gets an increase in value in the short term by transforming our NFTS value into a token. In the long term, due to the 30% additional staking rewards, this almost evens out besides the people that don’t actually stake for the maximum duration to get the maximum reward.

So not only are we transforming the value of our NFT’s into tokens, we are completely losing the “collectability” value of having an NFT. Our NFT comes in two values, 1) The collectability and art 2) The RevDis it provides by holding an NFT.

*The “throwaway” feeling of a token (even the name is not very appealing) as opposed to the very exclusive nature of the 5050 NFTs

Answer: I agree with it being a “throwaway” feeling as I stated above. No one gives a crap about a token. There is no collectability there, no value other than the price of it in the CEX\DEX.

*Whether a token would be able to hold value - I suspect it would struggle - and this contrasts strongly with the appeal of earning passive revdis in ETH or USDC

Answer: This is a complicated discussion and requires an in-depth answer regarding liquidity, liquidity pools, price discovery, price impact, the impact of futures (shorts/longs). Many DEFI and many other tokens have failed in keeping a solid price, let alone a stable price. I have written in my post about why having a token is not the way to go because mainly of liquidity and utility, affecting the price and its impacts of value.

*Whether the number 1 motivator of a token is to help the team with $$ for a runway to work?

Answer: My personal opinion is that, this is the only motivator for creating a token that includes our RevDis. The reason why is as I listed above. We can create a token without having any of our RevDis being transformed into the tokens value. Remove the RevDis part from the token all together.

Those answers are from both the document but also my opinion. If anyone would like to chime in and clarify my points or correct any potential mistakes and calculations I have made, please feel free to do so, no unwanted feelings on my part regarding harsh criticisms. Thanks

Here are a few more thoughts from me (to go with my several others above!)

  • there is still a lack of clarity on how the token would function. I think there is a lot of confusion. Let’s use an example to illustrate - and the team can confirm if this is correct or has errors in it:

As a current lizard holder, I would be likely to get an airdrop (from the 5% distro, and then later, another 5% distro) of LIZ at some point. However, this is like a “bonus” - it has nothing to do with revdis yet. It doesn’t reflect my total share of the DAO at all (after all, how could it, when I still have X NFTS, and someone may have bought the same number of NFTs after the snapshot, or may only have bought LIZ tokens on the open market).
I would therefore be free to sell these LIZ tokens, and then stake my lizards, and my future voting power and investment profit share would be determined purely by my staked NFTs and not by what I chose to do with the LIZ that I was initially airdropped?

When the time came for a rev distro, the DAO would market buy LIZ and then pay that out to lizard stakers, again, according only to our staked NFTS and not according to anything else we are doing with any LIZ tokens received from the airdrop? (This should be self-evident; as otherwise when stakers were paid out revdis in LIZ, they would be forced to sell NONE of that LIZ in order to simply maintain their total share of DAO voting power and future DAO ‘profit sharing’).

In the above scenario, the LIZ token would not be a reflection of our share of the DAO. It would not determine our cut of profits - only the staked NFTs would. Is this right? Under a model like this, the LIZ token would be more like an ecosystem currency, rather than a DAO share.

I would be more likely to support a token if it had such a use case - i.e. if it did not seek to serve any purpose connected to DAO investment revenue pay-outs, and did not seek to be the source of voting power. (Having said this, the token would still need to have several other layers of utility added to make it worth having).

If my example is wrong, can the team please explain:

  • how in practice can the tokens be used “interchangeably” with the NFTS for voting? This seems impossible in a world where both the NFTS and LIZ tokens exist, and where NFTS are being burnt occasionally while new LIZ tokens are entering circulation. It would only work if LIZ tokens were only brought into being by burning an NFT, i.e. one burnt NFT = 1000 LIZ.
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Thanks, appreciate the detailed reply. I take some issue with the document’s wording of this part:

"*How the DAO would go about having some protocol owned liquidity

Answer: The DAO protocol liquidity is 10% as stated in the document."

This does not explain how they will motivate people to provide the other half of that LP - the ETH - and how that motivation will be maintained in the long-term. It only says that 10% of the LIZ will be set aside for LPing. What about all the ETH to pair it with? As others have pointed out, getting enough good liquidity is a huge challenge - people will face impermanent loss, and at some point, it becomes unsustainable to keep the yield farm going if we are to have a fixed total token supply. (presumably a LIZ-yielding LP farm would be needed to make anyone LP their ETH initially). Hence why I am saying there would need to be long-term, protocol-owned liquidity in a DEX pair - just not sure how that would be achieved.

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Sorry for all the posts - I will make this my last one I think.

If there was to be a token, I think it should be called LOUNGE rather than LIZ.

Rationale:

  • A search on Coingecko shows no tokens called LOUNGE
  • A search on Coingecko shows an existing token called LIZ, another called LIZARD, and several that have other similarities
  • a LOUNGE token would make it sound more like the ecosystem currency of the underground lizard lounge; I think it sounds cool
  • LIZ to me sounds a little dopey for a token name (just my two cents)
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