A lockdrop model that provides immediate liquidity using UniswapFeatured on Token Economy #91 (subscribe now)Photo by Jong Marshes at UnsplashAirdrops have been a popular option due to the regulatory uncertainty surrounding token sale. Teams are trying out new distribution models, especially those that have raised private rounds but are more anxious about a public sale. Livepeer’s Merkle mine has been extensively dissected. Others are trying out variations on that ‘proof of work’ model. Edgewere is currently working on a lockdrop. To get the EDG token airdropped, one must lock up ETH in a smart contract for a set period of time. After that, the ETH will be unlocked. This effectively eliminates the possibility of lending ETH on Compound/Dharma etc. DxDAO is planning something similar. Edgewere will lock down the EDG tokens. After that, the contributors to the smart contract can withdraw ETH from the market. The price of XYZ token is determined by the total amount of ETH contributed in ETH terms. This could be problematic due to ETH volatility during the contribution periods. It could also be used with a series contribution periods where tokens are made available in smaller chunks. The second/third, etc. period contributors have a point of reference for pricing. [Need to think about this scenario more]. Another interesting implication is the immediate liquidity of the token that Uniswap provides. The game theory is especially intriguing in this light. Many people with whom I shared this draft have pointed out that one would be incentivized in order to maximize the ETH contribution to obtain as many tokens possible. To be able to sell the tokens and make a profit, the actor would have to first withdraw most of the liquidity from market. This would not allow enough liquidity to absorb the sale order. If this actor contributed 99% of the ETH to the market, he would only be able sell 1% of his stash. If a smaller number of ETH contributors knew that there was a whale, they would sell the token quickly, removing the incentive to maximize contribution. Is there a chance that no one contributes because they fear others will sell out? A smart contract could act as a DAO agent, interfacing with Uniswap in background and granting DAO shares to ETH contributors in proportion. This could achieve something similar. This would allow for governance to manage the fees and liquidity. This post is not intended to be considered legal advice. I wanted to share this because it is very rough and not all details have been considered true enough.



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