On 24 February we informed the Lucky Block community that we were moving decisively to solve the issue of lack of support for our taxation system when depositing from a decentralised exchange onto centralised exchanges.
We are now able to reveal the exact outline of the changes, and they represent a substantial improvement on the initial design, as communicated in some recent Telegram announcements.
Lucky Block will soon have two tokens joined by a bridge that maintains price parity between the two versions and does not alter circulating supply.
V1 LBLOCK token = DEX, play games, 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 games, 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 games pool and cannot be used to purchase games tickets.
V1 is for DEX, V2 is for CEX
So to summarise succinctly, if you want to play the games 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 the bridge locking 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.
Existing BEP20 contract address remains unchanged
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.
Ecosystem and price booster 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 games and provide reflections to token holders is protected while continuing to encourage long-term commitment to the project.
- Incentivising games participation and long-term holdings – The core functionality of incentivising playing the games – 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.
Background to the Lucky Block V2 upgrade
Those of you who have been avid followers of pinned messages on Telegram will be aware of the previously envisaged process bridging solution.
In that earlier proposal, a snapshot would have been taken and then a new version of the coin distributed to holders, which would have had a different contract address.
Although the process would have been automatic, it did require token holders to remove their old token address from their wallets and import of a new one.
Such an approach meant, for example, we would have had to work with third parties to maintain the price history of the token, and it would also have been necessary to pause trading for a short period.
Both events would likely have led to temporary but possibly significant selling pressure on the token due to the uncertainties perceived around the process and the attendant disruption.
But the new approach side-steps all of those potential issues.
We believe we have settled upon the solution that best suits our token holders. It ring-fences the intent of the original tokenomics of the platform while opening Lucky Block up to a vastly larger crypto audience.
Check back regularly here for updates on the timetable for the rollout of LBLOCK’s ERC20 token or join our main Telegram chat and those for various language groupings.