The AMA Session had 3 Segments:
- Introduction / Questions from The CryptoChainPh Team
- Questions from Twitter
- Live AMA
Segment 1: Introduction / Questions from The CryptoChainPh Team
The first segment will be the questions from CCPH Community, then followed by Twitter Questions and finally, the questions from the Telegram Community.
Can you please introduce yourself to the community and kindly give us an introduction about LIQUIDIFY?
Yes my pleasure! Hello everyone, I am Yuval, Chief Community Officer at Liquidify.io and today I want to introduce our project which we think will have great implications for the whole crypto market
Let me share our official introduction video, I think this gives a neat overview:
To summarize: Liquidify is a decentralized protocol that is designed improve the liquidity and growth potential in long-tail crypto assets (assets with low liquidity, low trading volume, and low market capitalization). Long-tail crypto asset holders can collateralize their assets through the Liquidify asset pool. The liquidity accelerator synthesizes all assets placed into the Liquidify asset pool into a fixed total amount of Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY).
The main functions of our protocol include:
Thank you for sharing. 😊
And giving us an introduction about Liquidify.
My next question is, The unique feature of Liquidify is the combination of long-tail asset and the mainstream assets, so how does it work?
Thanks, this is a very crucial question and I need to emphasize that the origins of our idea and business model are much older than the crypto market itself. The idea stems from the traditional finance industry, specifically how non-performing loans were restructured in many Asian economies after the Asian crisis of the 1990s. Typically bad loans were repackaged together with high-quality loans to make them more attractive and then resold to investors and institutions.
How the process will roughly work is shown in this graphic:
Liquidify will do something similar with crypto assets, we will allow people to lock up long-tail assets and also mainstream coins according to different valuations and receive LAT (our protocol token) and LFY (governance token) for that. We call this synthetization/collateralization mining and the architecture in which this happens is called the “liquidity accelerator”.
In short, by combining long-tail assets together with mainstream assets into a single asset pool, an index can be formed and the liquidity of all the assets within the pool can be combined and thus greatly increased. Instead of trading many small illiquid assets, users can trade LAT which represents many small-cap assets plus some selected mainstream currencies.
So it means, you will gather illiquid assets then combine them in one pool, then the pool will be represented by LAT Tokens that will make the small cap assets in to mainstream?
Yes plus those illiquid assets will be combined with mainstream assets such as BTC, ETH to boost liquidity further. LAT will represent all those assets' combined value plus LAT also has additional utility functions within the protocol, we will get to that later on;)
Thanks! We have not seen any similar project so far, but we believe there is huge potential, after all, who of us is not holding any long-tail assets in his portfolio? I for sure am
Small-caps as well as de-facto dead coins
If you find one please let us know, would be happy to exchange and cooperate
Why did you focus on bringing liquidity to long-tail assets? What is your inspiration for building Liquidify?
Exactly, one reason that we build on Binance Smart Chain is also that their ecosystem has so many long-tail assets
When we look at the crypto market today, it is pretty obvious from looking at Coinmarketcap that the concentration of capital and liquidity is very significant. Bitcoin alone as the leading asset currently makes up over 50% of the whole market capitalization of cryptocurrencies (and up to 70% at times). Probably way over 90% of capital is currently concentrated in the Coinmarketcap top 100. So this is what we call the “head” of the market, mainstream assets.
But what about the other 8000+ assets currently listed on Coinmarketcap? Those form a vast “graveyard” of largely forgotten assets and small-cap coins, which we call long-tail crypto assets. Many crypto users are still “hodling” these assets, sometimes because they still have faith but often also because they are simply not able to sell as there is no liquidity. This means that there is still a lot of potential in such assets in terms of community resources.
We all know in crypto the community is everything, attracting those long-tail asset holders to our protocol will make it much easier to create a stable userbase as well as unlock the value that is currently stuck in illiquid assets. We are here to help hodlers to unlock the potential of their long-tail assets!
You have two tokens, the $LFY and $LAT. What are their usecases and can you share to us your tokenomics?
First of all, LAT can currently be purchased via our private placement, you can apply via our website www.liquidify.io and secure your allocation. LFY can only be obtained by locking up assets in the Liquidify asset pool once the project launches. Both LAT and LFY will be tradeable on exchanges immediately after launch. Now let me explain both tokens in detail:
Liquidity Accelerator Token (LAT)
LAT tokens track the combined prices of all long-tail assets collateralized via the protocol, plus speculation and utility value. Since the total amount of LAT is fixed, and the price-determining parameters include the volume of Liquidify's long-tail crypto asset pool, it means that a larger asset pool will theoretically increase the LAT price.
An example: the total supply of LAT is 45 million. If we have 45 million worth of assets locked in the pool, then the value of LAT would objectively be 1$ per LAT, not considering any speculation. Now if an additional 45 million worth of assets enters the pool while LAT supply cannot be increased, then the value of LAT would be 2$. There is currently over 70 BILLION worth of assets locked into DeFi applications.
This graphic illustrates what will happen to the LAT price if our protocol reaches a comparable TVL as the top DeFi projects. The numbers are based on the fully diluted supply of LAT (45 million LAT). Note that this is simply based on the value of assets locked in the protocol and does not consider any utility or speculation value, the actual price of LAT could be much higher in either case
Additionally, the price of LAT will also be impacted by real-time price rises and falls of the long-tail asset pool portfolio and the asset weight ratio parameter.
Usage scenarios for LAT tokens in the Liquidify protocol include:
3.6 million LAT (total supply 45 million) are currently sold via private placement, you are free to apply via our website liquidify.io and secure your allocation. For the detailed allocation and lock-up schedule, please refer to our white paper section 4.1.
After protocol launch, LAT can only be obtained through synthetization mining, by locking up assets into the Liquidify asset pool.
Now let us talk about...
Liquidify Token (LFY)
LFY is the Liquidify protocol governance token. Token holders can exercise their own voting rights in the Liquidify governance system or delegate tokens to others for voting purposes. Any token holder can participate in Liquidify's governance. As long as a user holds 1% of tokens via personal ownership or delegation, they can initiate governance proposals, including those that posit changes to the long-tail crypto asset pool allowlist, asset pool portfolio weight ratio, lock-up incentive policies, transaction fees, and other protocol-related parameters or variables. It is even possible to propose changes to the basic infrastructure of the protocol.
LFY won’t be sold and can solely be obtained through synthetization mining, by locking up assets into the Liquidify asset pool.
For my last question, please tell us about your plans for 2021. What are you currently working on? Can you share us your roadmap?
Essentially, in 2021 we plan to fully launch the Liquidify protocol in 3 stages:
Liquidify 1.0: Collateral Synthetization (April 2021)
Liquidify 2.0: Long-tail Asset Pool Synthetization with Extended Allowlist (June 2021)
Liquidify 3.0: Long-Tail Asset Pool Synthesis with More Flexible Asset Pool Setup Rules (October 2021)
You can view it slightly more detailed here:
For our broader plan and vision you can also refer to our litepaper which you can find in the documents section on our website: https://liquidify.io/documents
Segment 2: Question from Twitter
Question #1 from @4BracesCP - You have your private placement or whitelist coming soon and I’m interested to join. What are the process of applying for the private placement and is KYC a requirement?
You can apply for the private placement via our website: https://liquidify.io/private_placement
There is standard KYC and the minimum purchase amount is 5000 LAT.
You simply need to follow the process as below:
Question #2 from @19ragum -
Do the token holders have the right to participate in the governance of the project? What kind of decisions can they vote on about the project?
As long as a user holds 1% of tokens via personal ownership or delegation, they can initiate governance proposals, including those that posit changes to the long-tail crypto asset pool allowlist, asset pool portfolio weight ratio, lock-up incentive policies, transaction fees, and other protocol-related parameters or variables. It is even possible to propose changes to the basic infrastructure of the protocol. All holders of LFY tokens can vote on those proposals.
Please also refer to my introduction of LFY given above
Question #3 from @Prasadperaka - As an investor, safety is always one of the biggest concerns. What kind of security protection do you provide for Liquidify? How to ensure the safety of customer assets?
Liquidify is a decentralized project, funds are not held by the project team or by any centralized custodian but in the smart contract. This limits the risk of centralization but we recognize that this introduces a different kind of risk, which is the security of our smart contract. To guarantee user safety, Liquidify will get a smart contract audit by a leading smart contract auditing firm such as Consensys or Quantstamp.
Question #4 from @Hiphop27081772 - What Liquidify has achieved so far? Can you tell me 1-3 things that liquidify looks forward to in the future?
So far we have completed the basic protocol design and we will be able to launch version 1.0 of our Liquidify protocol in the next 1-2 weeks. This includes also the launch of LAT and LFY tokens. Naturally what we are looking most forward is the safe launch of our protocol, stable development and increase in total value locked, and eventually the full release of our protocol 3.0 and the subsequent decentralization of our governance structure.
Additionally, we have kicked off our community building efforts globally and so far we have established 7 communities in different countries/regions:
Question #5 from @Lunakyeot - DeFi acquires attention when their TVL becomes massive and many people will deposit their funds on it. How can your project gains that massive TVL, what are your plans to gain the trust of the investors?
The possibility to liquify assets which were illiquid before will naturally drive bother holders of long-tail assets as well as project teams to our project. We have already been contacted by several projects looking for a cooperation with us. The unique ability of our protocol to transform illiquid long-tail assets into LAT and LFY will provide a big incentive for people to come to our protocol, especially when the number of long-tail assets sharply increases, such as in a bear market.
Thank you for answering all the Twitter Questions. We will now move forward to the most exciting part of this AMA! The Telegram Questions!!!
Segment 3: Live AMA
From Ukniser Linh:
Currently from where i can buy $LAT? Is it possible that I can get $LAT only by holding it?
You can buy LAT in the private placement right now or later by locking up assets into the Liquidify asset pool. Liquidity providers on DEXes will also be rewarded with a share of LAT. Last but not least, you can buy LAT on exchanges soon after launch!
From Cristina Sebastián:
Can you move the Liquidify into another blockchain in the future for example if gas prices get lower for ethereum?
Liquidify chose to initially build its protocol on the Binance Smart Chain (BSC) and Huobi ECO Chain (HECO). Compared to the Ethereum public chain, BSC and HECO are more suitable for the technical development and business expansion of the Liquidify protocol in the early stages.
Of course, BSC and HECO are only Liquidify's preferred public chains in the initial stage. Liquidify protocol is blockchain agnostic, which means it is not limited to one specific chain or ecosystem. In the future, the Liquidify protocol will be available on Ethereum, Polkadot, and other major chains.
Revenue is an important aspect for all projects to survive and maintain the project / company. What is the way to generate profit / revenue of token? What is the income model?
Excellent question. As most DeFi projects, Liquidify will mainly earn income from fees to use the protocol. Fees are being paid by users each time they want to collateralize their assets, means locking up those assets into the asset pool and receiving LAT/LFY in return. The same goes for the reverse process, as users can also exchange LAT back to their original asset.
From Elton John:
As a DEFI project, it will not complete without burn or buyback system. So does Liquidify have burn/buyback system to increase value of $LAT ? If you have, how does that feature work?
There is no burn or buyback mechanism so far, however, we have designed a special mechanism to recirculate LAT and at the same time decrease the amount of LAT available for synthetization mining constantly, which is equal to increasing the mining difficulty of LAT. Over time, less and less LAT will be available for synthetization while it is very likely that the number of long-tail assets will increase over time, especially in a bear market. As the supply of LAT is limited while the potential number of long-tail assets and their market value is theoretically unlimited, it is likely that the value of LAT will appreciate significantly, especially considering the additional utility and speculative value of LAT.
How will you prevent "copies" of tokens from being included for the purpose of defrauding users? Do Liquidify have a system to remove these tokens from the pool?
Initially we will have an allowlist to determine which assets can be accepted to be locked into the Liquidify asset pool, so this will solve the problem of fraud which you mentioned. In later stages we will first significantly expand the allowlist and then we will allow community voting on which assets to include.
However let me emphasize again how valuable community resources are, as long as we can attract long-tail asset holders to our protocol, our ecosystem will benefit. That being said, we will have strict requirements and an algorithm will analyze and evaluate different kinds of assets which are being put into our asset pool.
From Reinhard Van Astrea:
NFT ecosystem is huge and there is fierce competition in the DeFi+NFT space Which NFT project do you see as your competitors? And how do you plan to compete with them?
We are not an NFT project, however, let me tell you that we will also accept NFTs to be put into our asset pool in future! Yes, NFTs also need liquidity and many of those actually lack liquidity, so this fits well with our use case. We are not even limited to crypto assets but tokenized traditional assets such as real estate, stocks and bonds will also be included into our protocol.
Thank you everyone for your amazing questions! I am painfully aware that I cannot answer all of them today, but if you have pressing questions on our project then feel free to join one of our groups and ask your questions there directly. Thanks for joining our AMA today! ❤️🥳🤩
Liquidify is a decentralized protocol built to improve the liquidity and growth potential in long-tail crypto assets (assets with low liquidity, low trading volume, and low market capitalization). The holders of these long-tail crypto assets can collateralize their assets through the Liquidify asset pool. The liquidity accelerator synthesizes all the assets placed into the Liquidify asset pool into a fixed total amount of tokens, the Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY). In contrast, LAT holders can also use the liquidity accelerator to convert LAT back to the corresponding long-tail assets with real-time prices, and long-tail assets can also be swapped among one another.