Today the Lucky Block team revealed the nature of the changes to its token that it is planning to make to solve the issue of maintaining its tax system while speeding listings on centralised exchanges.
Lucky Block will have two tokens linked by a bridge to maintain price parity across the two versions. The elegant solution also leaves the circulating supply of LBLOCK unaffected.
For more on how to buy Lucky Block, read our comprehensive guide.
V1 LBLOCK token = DEX, play lottery, get rewards, tax on sales
The original Binance Smart Chain-based (BEP20) version of the coin remains unchanged from the viewpoint of existing holders of the token on decentralised exchanges and in self-custody wallets.
The BEP20 token (V1) will be used to play the lottery, earn rewards and pay 12% tax on sales.
V2 LBLOCK token = CEX day trading, no tax, no rewards
A new Ethereum-based (ERC20) LBLOCK token (V2) will be issued for those who wish to trade and hold LBLOCK on centralised exchanges. It is purely for day trading.
The V2 ERC20 token will only be listed on centralised exchanges and will not attract any taxation, be they sell or buy transactions.
However, the V2 token does not receive rewards from the lottery pool and cannot be used to purchase lottery tickets.
V1 is for DEX, V2 is for CEX
To summarise, if you want to play the lottery and receive rewards you must use V1.
Alternatively, if you only want exposure to the price movements of LBOCK and are therefore only primarily interested in day trading then you must hold the V2 version of the token.
How bridging works
In terms of how the bridge itself works to maintain the same price across both versions of the token and leave circulating supply unaffected, a locking mechanism is being employed.
When the Ethereum-based V2 token is purchased, the same amount of Binance Smart Chain-based V1 tokens will be locked. And it will be the same for trades in the other direction: when V1 is purchased a corresponding amount of V2 will be locked.
Also, the current contract will remain in place, so there will be no need to import a new contract address.
However, a new Ethereum contract will be added. Centralised exchange LBank, which lists LBLOCK, has confirmed that it will release a detailed announcement, in coordination with Lucky Block, concerning the upgrade and migration process and how it will enable users to swap the V1 token held on LBank to the V2 version.
Both the ERC20 and BEP20 contracts will run side by side, with the price maintained via the bridge.
Price boost for Lucky Block
Taken together, the v2 plans represent a substantial boost for the entire ecosystem and the price of the LBLOCK token.
- Price booster – By opening up to Ethereum markets a flood of liquidity will hit LBLOCK markets which should strengthen market depth, volumes and price.
- Sales tax protected – The innovative sales tax to fund both the lottery and provide reflections to token holders is protected while continuing to encourage long-term commitment to the project.
- Incentivising lottery participation and long-term holdings – The core functionality of incentivising playing the lottery – and therefore to hold the V1 BEP20 version of LBLOCK – is safeguarded.
- Turbo-charge exchange listings – On the other hand the difficulties we encountered in attempting to get centralised exchanges to agree to implement our tax on deposits from DEX to CEX is no longer an issue.
- Ends tax avoidance risk – Also the possible loss of funding represented by deposits from DEX to CEX being able to avoid the sales tax is averted. When transferring from BEP (V1) to ERC (V2) the 12% tax will be levied.
- Tax-free day trading – LBLOCK deposited on the CEX will be able to be traded tax free.
- Swells trading volumes on CMC – Another win is that volumes of both versions of the token will count towards LBLOCK volume on coinmarketcap.
Token holders who have no desire to trade on a CEX are not affected in any way by the introduction of the V2.
There are no custody issues for holders of LBLOCK in self-custody wallets, such as Trust Wallet and Metamask, for use on DEXs.
Additionally, for those holding for the long-term to receive rewards passively, perhaps by keeping their tokens in a hardware wallet such as Ledger, there is no action that needs to be taken.
Nevertheless, in both sets of circumstance, token holders will reap the value-enhancing benefits of the the new, improved and more open token economics.
Accelerated exchange listings, Lucky Block token price lift incoming
Because of the increase in trading volumes and likely preponderance of buying of the Ethereum token, we believe the price will receive substantial positive support.
In short, the potential universe of buyers in the market for the token will swell considerably.
The big upside of the introduction of the CEX-friendly Ethereum V2 token is that CEX listings can now be expedited, although we are not at liberty to divulge a timetable for those listings at this stage.
As with the v1 contract, the V2 contract will be audited.