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I've read Liotes Whitepaper - Here's What I Think

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khazrakh
@khazrakh
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I always get excited when a new game is coming to Hive, even more so when it's coming from people that already have a track record of creating great projects. In terms of Liotes, that's two of CTPTalks finest, namely @ph1102 and @achim03. In today's article, they've also released the whitepaper for their project. I've went through all the details it provides and in this article, I'm going to give you a short overview of all the relevant stuff and provide a first impression of everything I've read.

First things first, Liotes is not a game in the classical sense, it's more like a gamified investment scheme. Think of projects like @lbi-token or Disco Hedge but with a little twist added for additional enjoyment. The project brands itself as a "Blockchain Adventure", thus creating its own genre in the process. Liotes has its own background story providing some reason for investing in the project:

We discovered a planet named Liotes. The planet can’t be inhabited at the moment but it has a small promising atmosphere and there is constant air circulation on the surface. With our engineers, we developed mills that are able to transform this air circulation into energy. This energy will be needed to terraform the planet and make it fit for life.

So how is this going to work? Liotes will sell Liotes Energy Mills or LENM. As the name suggests, these are actually miners that will provide holders with Liotes Energy or LEN. This energy is then going to be used to terraform the planet. Or at least that's how the story goes. In more mundane terms, this is where the passive income is going to come from, as LEN will receive additional use cases and will also be bought back by the project itself. Let's get into some more detail:

LENM will be sold at 4 Hive each during the initial sale and at 5 Hive later on. Every hour, 20 random LENM will mine 0.3 LEN each, so a total of 6 LEN per hour or 144 LEN per day will be mined. Once 5000 LEN have been created, the buyback mechanism is going to kick in. At the above rate, this is going to take approximately 5 weeks to happen. Not all LEN will be bought back, there will only be buy orders for all LEN in circulation above the 5,000 mark. The buyback price itself will be dictated by the amount of Hive in the buyback account. But how is the Hive getting into this account?

Now that looks pretty simple, right? Let me explain a bit. The initial Liotes fund holds all the Hive from the LENM sale and also Hive from the founders of the project. This Hive is never going to leave the system, it's permanently staked and will be used to delegate it to various other projects. This in turn will generate income for the project. This income is used for three different purposes:

  • 25% of the income goes back to the Liotes fund
  • 50% will be used to create additional income streams
  • 25% will be used to fill the buy back fund

Additional income streams are other tribes tokens like LEO or CTP but could also be completely different projects on and off the Hive blockchain. 80% of the income from these additional income streams is going to be reinvested to increase said income, while 10% each are going back to the Liotes fund and as payment to the guys behind Liotes.

From a investment standpoint, I really like the concept, everything seems sound to me. By not touching the Hive inside the Liotes fund, the overall value of LENM should always go up (at least in terms of Hive value). The buy back price for LEN is probably going to be pretty low in the beginning but should also only go up from there. It's a clever way to grow the value of the whole ecosystem and at the same time paying out some dividends to everybody holding LENM. So the economic side of things seems pretty decent. Nevertheless, there's more to Liotes than "just" the investment.

It's still a blockchain adventure after all, so there will be objectives and missions given to LENM holders which the whole community is going to try and accomplish together. There's no exact information on how this is going to look like, but I imagine we could try to get into different projects together or burn a certain amount on LEN to unlock something else. There are certainly a lot of options to explore, both in terms of creating actual value and in terms of gamification. At the same time, there will be additional use cases coming for LEN. Taken from the whitepaper:

On the website liotes.com, there will be a store where people can purchase or rent a range of products and services with LEN tokens. It will be possible to buy and rent NFT’s of blockchain games, rent Hive-Engine token delegations, etc.

All things considered, I really like project Liotes. It's another interesting investment opportunity on Hive, but it also promises to be fun and should provide some additional use cases. After the FarmFarmer debacle, many users will be a bit wary to get into another gamified investment scheme but I feel like Liotes is going to have a way more solid economy than FarmFarmer ever had. Thanks to the way the fund is built, value should only be going up over time. To tell the truth, though, it's hard to tell, at least for me, whether the return should be better or worse than if I just staked the Hive myself.

Nevertheless, I enjoy getting involved with as many different projects as possible - the more the merry. At the same time, Liotes will actively lock away an increasing amount of Hive "forever" and that's always a great thing to do. Because of that, I'm certainly going to acquire some LENM for me so hopefully, we'll both earn some money and have some fun together with this project!

And that's all from me for today, thank you all for reading and see you next time!