Weekly Altcoin Update – Week 1

The first weekly altcoin update of 2022, highlighting XCAD Network and LTO Network.

XCAD Network

XCAD Network has ended 2021 with the release of DEX and its liquidity token dXCAD. The DEX has attracted significant trading volume, and due to the high APYs, the TVL is still rapidly increasing. Currently, the DEX has a daily volume of over 1.38 million and a TVL of 31 million over seven liquidity pools. It is expected that the TVL will increase even further with the release of new ZRC-2 trading pairs (i.e. GZIL/dXCAD).

Dxcad token

The dXCAD token has increased by over 300% in just five days, with over 500 token holders signalling the significant interest of the ZRC-2 community in the dXCAD token. The current marketcap of dXCAD is 15+ million, with a total supply of 40,000 tokens. The ZRC-2 community is especially interested in dXCAD and the XCAD DEX due to the relatively high APYs compared to direct competitors. Additionally, it gives investors another reason to put their XCAD tokens into LP pools to ensure capital efficiency.

Content creators liquidity offering (CLOs)

The XCAD ecosystem will offer CLOs, allowing investors to receive content creators tokens first. The offerings will utilize a staking system to stake their XCAD into a liquidity pool. The investor receives a chance to get into a CLO; the more significant the stake, the more chances. Essentially, the more XCAD the investor stakes, the higher the probability of getting into a CLO. Suppose the investors receive the possibility to invest in the CLO. In that case, the tokens paired with the Creator tokens are permanently locked in liquidity and, therefore, removed from the total supply. The staker receives creator tokens based on their share of the liquidity pool. Due to that, there are currently more than 50 content creators, the deflationary impact on XCAD Network’s native token $XCAD is significant.

LTO Network

LTO Network has made significant changes to its tokenomics to make its staking program more attractive to investors. Currently, approximately 30% of the LTO holders are taking due to a non-competitive APY rate. The ecosystem will change its APY in the upcoming shift in tokenomics.

Minting and burning

The LTO Network ecosystem will increase the staking APY by giving out a black reward of 35 LTO, which linearly decreases to 10 LTO over five years. To offset the minting, the burning mechanism will be updated. The old burning mechanism utilized a fixed burn rate of 0,1%, and this will change to a variable rate whereby 50% of the transaction fee will be burned, the other 50% is given to nodes for mining a block. The inflation depends on the block reward; at least 20 LTO needs to be spent on transaction fees to offset the minting after five years. It is expected that the LTO Network ecosystem will grow, and therefore more transactions will happen, which offset the minting.

Higher APY, lower circulating supply

The estimated APY of the new tokenomics depends on the amount of staked (i.e. leased) LTO Network tokens and the inflation. As highlighted in the underneath figure, if the amount of staked coins remains the same, the APY will grow to approximately 15% for the first year. By having more coins in a staking mechanism, the circulating supply decreases. The main benefit of a lower circulating supply is that the volatility is lower; liquidity providers are more capable of controlling the market and preventing volatility shocks.