Transition Into LIQUID

This is a follow up article to our previous “ICE -> LIQ-ETH LP Tokens” story

As previously stated, LIQUID’s approach to a stable platform will involve the ability to repetitively change each pool’s swap fees, as well as stabilize price wise on top of an appreciative DAO token. ICE’s deposited value of 1 ETH each will be halved to create the only LIQ tokens that will ever exist. Anyone holding x amount of ICE tokens on launch day (end of GTO) will instantly become liquidity providers for LIQUID’s first pool.

Calculating the potential initial trade value of each LIQ token should be quite simple. If each ICE token represents 1 ETH, then the launch day value of LIQ estimated :

1 LIQ = (ICE_value * 2) — 1

ICE_value is the value of each ICE token on the day governance offering finishes

Because the 0.50 ETH in each LP token pair doesn’t change value against itself, the 0.50 LIQ tokens in each LP token pair will incorporate the rest of the overall value of that LP token.

Example : (If ICE tokens appreciate to 2 ETH on the open market)

1. Purchase 2 ICE tokens for a total of 2 ETH
2. On launch day, 2 ICE tokens become -> 2 LIQ-ETH LP tokens
3. 2 LIQ-ETH LP tokens = 1 ETH + 1 LIQ token
4. If ICE was trading for 2 ETH, then // 4 ETH = 1 ETH + 1 LIQ token
5. 1 LIQ token = ~ 3 ETH

This immediate disproportion in price between exchanges carrying LP tokens and the actual pool initializing on LIQUID’s platform will be a prime opportunity and a driver for the pool to start selling LIQ for ETH to correct the liquidity balance. In this last example of ICE tokens trading for 2 ETH, the pool would shift accordingly, selling LIQ on the open market until a 2:1 ratio is reached.

While all of the actual TVL will occur during the governance offering period, we still predict LIQUID having an initial buying frenzy once the LIQ tokens are unlocked and able to be traded directly for other ERC-20 tokens outside of LPing. Once the arbitration slows as LIQ approaches it’s speculative value above ETH, volume should be steady and price swings will subside.

All forms of platform treasury that may be generated will need to be voted on and implemented after launch day. LIQUID will launch without any treasury or funds to truly decentralize the manner in which it is eventually set up. Regardless of what techniques are used to generate revenue for the platform (LIQ holders/LPers), they will be important early voting decisions that will affect the long term price appreciation of LIQ tokens.