LT Blockchain Upgrade - Potential Launch Plan, and a Massive Surprise! Your Vote is Needed NOW!
By: Locktrip.Com, Loc Token, Official Blog
Tags: Proof Of Stake, Blockchain, Cryptocurrency, Altcoins, Staking

In this post, you will find:

Update on the progress we’ve made on polishing the LT blockchain economy — higher staking, better infrastructure security, more income

Solution proposals resolving for all limitations preventing us from deploying the LT Blockchain and unleashing its full potential

A very specific proposal for launching the chain by end of 2020

A new staking calculator

A proposal on how to mitigate the Kucoin hack and protect the victims and our community in a “2 birds with 1 stone” strategic move

A community vote that needs your attention in order to put the whole plan in motion as one elaborate plan. Right here. Right now.

Excited? Great…make sure to read the full post as this is perhaps one of the most important community votes you will ever make. It could also potentially be one of the most advanced asset deployments in the history of LockTrip.

So here we go…….

Update on LT Blockchain

Over the last 10 months, we invested a considerable amount of time examining not only the stability of the current Testnet 2.0 of LT chain but also its economic design and all possibilities for further improving the current model.

The LT chain we presented in late 2018 solved the biggest problems commonly known with blockchains. You can read about them in the original blockchain manifest.

But the solution left four strategic limitations that were very specific to our current operations. These limitations are as follow:

1. Launch Dependency on Booking Volumes

The staking rewards of the LT chain heavily rely on a strong transactional economy. Although a support mechanism was announced in the form of fixed block rewards for stakers, these were designed to gradually phase out over a period of 5 years. After this period the entire staking economy will be 100% reliant on the transactional economy which to a certain degree is impossible to be guaranteed.

This is why we at LockTrip set the launch date for the LT chain as the moment at which we sustainably receive 150 bookings/day. Reaching this goal creates enough transactions to ensure a steady staking income and reduce dependency on fixed block rewards.

However, this has the negative side effect of delaying an otherwise extremely valuable asset until sufficient transactions are reached.

2. Unpredictable Staking Weight and Network Protection

Staking is a critical activity for the maintenance of the blockchain. The more nodes are online, the better it is for the health of the chain, as it increases redundancy and at the same time strengthens the protective shield against attacks.

The combined protection of a chain depends very much on the staking weight, which is the number of coins being staked at a particular moment. This on the other hand depends strongly on the transactional economy, as coin holders will be more motivated to stake their coins if the returns are attractive.

Should the transactional economy be insufficient or inconsistent at any moment in time, it could open up attack vectors due to insufficient protection.

You can read more about this in the newly published blockchain whitepaper (section 2.5). It all comes down to the “Security Factor” outlined there.

3. Missing out on substantial opportunity due to having a pegged economy with LOC

With the blockchain manifest announced in late 2018, we presented the idea of a LOC-powered blockchain. The reason for this was simple yet powerful: The goal was to funnel all blockchain-related economies through the LOC token, by turning it into a coin. This would combine the marketplace economy with the blockchain economy in a single coin, turning it into a super-coin.

However, there is one limitation arising from this. In order for it to work properly, the two economies need to harmonize with each other. LOC having a fixed supply with a deflationary model would make it impossible to have an inflationary based staking income.

This means that although a super-coin is possible, it comes with a number of limitations. If the true potential of the blockchain can not be unleashed due to “harmony limitations” with the marketplace, this can create significant opportunity costs.

4. Lack of Self-Identity and Blockchain Neutrality

The super-coin concept elaborated above does not only create economical limitations, but more importantly, peggs the economy of a centralized marketplace with the one of a decentralized infrastructure.

If half of the coin economy is dependent on a single project, is it really a fully neutral blockchain? Can it develop its own and independent identity and attract as many products to built on top of it?

Although difficult to put in numbers, there is no doubt that if the answer for the above questions is “no”, this could become a limiting factor for adoption, or at least reduce the pace of it.

The Solution we Propose

The limitations above seem uncorrelated to each other, but they can be solved through a few strategic tweaks to the existing model.

A — the birth of a unique project “Hydra” as an independent blockchain with its own unique economy and airdropped to the LOC community

In order to solve the blockchain neutrality and self-identity limitations, we are proposing to move away from the single-coin concept and instead launch the blockchain independently under the name of Hydra. This will ensure that it will develop its own identity through independent branding, an independent “HYDRA” coin, and its independent decisions through decentralized community governance.

Important: The new proposed blockchain has been designed, built, and funded by LockTrip’s crowdfunding, which is why it belongs to the LockTrip community, so here’s how we plan to elegantly fulfill this commitment.

In order to honor the contribution of LOC community, all HYDRA coins will initially be airdropped to LOC token owners on a 1:1 basis over a period of 50 weeks (2% of total supply each week). This approach ensures that the community that funded the development of the blockchain is honored, regardless of the unpegging. The gradual drop also will ensure there will be plenty of time for all members to take the corresponding actions to acquire their own HYDRA coins. It will also create a unique micro-economy between the HYDRA and LOC during the prolonged airdrop campaign.

As part of the proposal, the LOC token will be migrated as the first token to be utilizing the Hydra chain — with the same hirarchical status as other projects utilizing the network. This way LockTrip and LOC will enjoy all the technical features of the blockchain and will preserve its own unique deflationary economy. We will also work on a plan for migrating EVED and other potential partners on top of it as we make our progress.

B — Unleashing the Full Potential of HYDRA Chain

Since there are now two assets (LOC and HYDRA) capturing the economies of the marketplace and the blockchain respectively, they no longer need to be designed in harmony with each other. The economical limitations described earlier will no longer exist, allowing for a more aggressive design with each one tailored towards maximum upside potential.

As a result, we have designed the HYDRA to be optimized to a unique inflation-based economy, which offers a number of advantages:

Supercharging staking yields by significantly enhancing block rewards

Turning fixed block rewards economically sustainable and preventing them from phasing out, making them a permanent feature. HYDRA will empower fixed inflation in %

Introducing high predictability for staking yields and eliminating security risks due to too low staking weights

Strongly incentivizing holders to actively stake their HYDRA coins thus reducing money velocity

Enabling burning on transaction fees to counter-balance inflation — by utilizing the 50% Transaction fees protocol burn feature, as transactions start to grow, the deflationary economy will work in parallel with the inflationary block rewards. This will solve one of the most challenging problems on how to manage the monetary base (total supply) and reduce inflation as the network matures into an adoption driven system (make sure to read the HYDRA whitepaper for more details..)

Please note that the inflation-based model was not possible before, as the inflation generated by fixed block rewards was incompatible with the fixed supply of LOC. The two concepts would be working against each other.

With the new unpegged solution it will be possible to maintain a deflationary LOC economy on top of an inflationary blockchain. A unique win-win that unlocks maximum potential on both sides.

This setup also eliminates cross-economical risks that would otherwise be caused by the interdependence.

Since the block rewards will no longer be solely dependent on the transactional economy, this also allows us to launch the chain much sooner than it was otherwise planned. The new target date will be December 2020.

The New Staking Economy

The staking economy will experience a dramatic boost through the introduction of the fixed percentage based inflation setting. The starting setting for the inflation will be set at 20% for the first year of operation. Following the completion of the airdrop, the setting can be voted on by the community (within the range of 0 and 25%), although we expect the rate to remain stable for a considerable amount of time.

This will greatly incentivize the community as well as new members to join and participate in maintaining the blockchain, while at the same time generate strong annual yields for everyone who decides to become a node.

Due to the fact that not everyone will stake at the same time, the APR could end up being significantly higher than the inflation setting. Below are some examples of what staking yields can be expected:

The calculations above only take into account fixed block rewards. Income generated from transaction fees that aren’t burnt must be added on top of that.

The inflation is a guaranteed stream to nodes. Nodes are the most critical element of the equation. The guaranteed inflation maximizes network growth and stability. It also adds protection against multiple attack vectors.

-> As the network becomes more stable and powerful, it stimulates the ecosystem to grow as a transactional economy

-> The unique burn feature on transactions starts to fuel the deflationary economy which starts to work in parallel with the inflationary block rewards

-> The two work in a unique dance which leaves market dynamics to determine the monetary base, without putting any risk on node infrastructure. If adoption is weak, the chain will be in an inflationary mode and grow its value based on price and supply growth. If deflation overpowers the inflation rate, the supply will remain stable or even start to decline.