Last week we announced our new tokenomics update, JUICY. We sat down with LTO Network lead architect Arnold Daniels to discuss all things “JUICY” to better understand his thoughts and learn more about why this update is going to be an important part of LTO Networks vision for the future.
Why did LTO Network decide to change the tokenomics?
LTO Network is focused on real word applications with clients that operate outside the realm of crypto. With the current tokenomics, the high volatility of LTO as crypto currency directly influences the cost of using the network. With the new tokenomics costs will be more stable for clients and integrators.
Additionally, we want to make LTO more resistant against sharp downtrends of the crypto currency market. Currently, the majority of LTO is kept on exchanges. By introducing block rewards, we make it more attractive for people to stake LTO on our mainnet and support the security of our blockchain.
How complicated was the process?
Tokenomics are at the core of any permisionless blockchain. Any changes affects everyone involved, including coin holders, node operators, and clients. The initial challenge was coming up with a model that would benefit all parties, while fulfilling the key objectives and without gravitating towards centralization. Especially the last was a challenge as the most obvious solution was for the team to take an more authoritative in terms of fee price.
Communicating the goals with the community and then incorporating their feedback was the main step that we needed to overcome and between myself, the marketing team and the community, we had excellent feedback which helped me come up with a clear path forward. 🙌
The model we settled on required a large number of changes to the core of the LTO public node software. But, by having a clear path, it was possible to implement this through small iterative steps.
What’s your favourite thing about the new upcoming tokenomics?
The name “JUICY”. 😂 But seriously… the JUICY tokenomics better align usage and incentives in terms of price movement. Clients will directly benefit from a price increase of LTO through lower fees, meaning more cost efficient transactions with their existing coin supply should the LTO token price grow. That is exciting.
How do you expect clients and integrators to respond to the new tokenomics?
We have been discussing this heavily with our integration partners. It's expected to be a further catalyst for growth. It will also reduce and ideally eliminate the need for the team to provide a fiat on-ramp for transaction fees.
Will the new tokenomics help the project grow?
The idea is to make it more attractive for integrators to push our network as a solution to their clients. We have specific clients who want to do more on our network that have also asked for this.
We also expect that the enhanced APY options will attract additional coin holders and convince current speculators to become long term holder through staking. This in turn will get more eyes on LTO as a layer-1 solution, drawing in organic interest and projects from within the crypto and B2B space.
What’s the process from here?
The JUICY tokenomics upgrade is currently on testnet. It will activate there on the 7th of April 2022 around 05:45 UTC. At that time, the hunt for bugs will start and any necessary fixes will be implemented. Once the testnet version is fully functional, the upgrade comes to mainnet for the community consensus voting.
Activation on mainnet takes place 7 days after the consensus voting is successful. It’s hard to pin a precise voting and activation time to these updates as this depends on the fact if any bugs are encountered and how easy/difficult it is to solve them. Our aim is to bring the JUICY tokenomics upgrade to mainnet before the end of April, but it’s best to keep an eye out on the telegram announcement channel and/or LTO Network twitter account if you want to be in the loop on its progress.