Since 2017, cryptocurrencies have experienced crazy highs and crazy lows, making a fortune overnight, and succeeding or failing overnight. This volatility is one of the main reasons why cryptocurrencies have been relatively slow to gain mass adoption. In addition to volatility, another issue that many people worry about is the lack of security and regulation in the market. This can be seen by the countless exchange hacks and carpet pulls that seem to happen every week. In order for cryptocurrency to enter the next stage of maturity and achieve mass adoption, investors and users will need to rest assured that their funds are safe.A promising organization that may have a perfect solution is Liquidity Dividend Agreement (LID).
What is a liquidity dividend agreement?
Liquidity Bonus Agreement It is an emerging organization that provides locked-in liquidity services for cryptocurrency projects that launch their products through ERC-20 tokens. It allows non-custodial pre-sales to lock the liquidity of tokens in an untrusted manner through Uniswap. This lock-in process will prevent every investor’s worst nightmare of seeing their hard-earned money disappear through “scammers” scams designed to reduce the liquidity of DeFi projects.
This year, interest in Uniswap and DeFi projects has surged. Many investors have obtained huge returns on their investments, but many have suffered the pain of being deceived. The following are three reasons why the LID protocol is expected to be a big success in the next few years.
Reason 1-Smart Contract
As mentioned earlier, one of the main issues preventing the widespread adoption of cryptocurrencies is the hesitation of potential new investors. Even if the price of Bitcoin is close to the highest level in history, investors are reluctant to deposit hard-earned funds in projects they don’t understand, and feel too risky.Post sushi event The point of view that the lead developer withdrew from liquidity and exchanged his tokens for Ethereum is completely understandable.
The question is, what can the cryptocurrency community do to reassure potential investors? One solution is to allow new projects to raise funds through pre-sales and opt-in to locked liquidity agreements, such as those provided by the LID agreement. The smart contract used by LID will lock the liquidity stored in Uniswap in an untrustworthy manner and prevent the main developers from clearing the liquidity, such as the liquidity generated by SUSHI.
New projects that choose to use the LID protocol will be considered certified, which will reassure the investment community that their funds are safe and will not be stolen in the middle of the night.
Reason 2-Community Driven
One of the biggest problems faced by staking platforms is when agents decide to sell tokens during a period of rapid market decline. Although the action may be for self-protection, it did not benefit the entire community. It is an important part of building a successful platform that can stand the test of time. In order to provide potential solutions to this common problem, LID Staking is committed to providing more incentives for users who perform beneficial actions for the entire community. Some examples include:
- Voting multiplier to encourage participation in DAO voting
- Stakeout recommendation
- DAO tax incentives
Reason #3-LID token price will appreciate
Although investors will certainly appreciate the project’s efforts to establish a long-term sustainable project, many people will of course focus on their efforts to increase the price of tokens. When the price of coins rises, it will increase the community’s confidence in the project, which has a positive trick flow effect on all matters. Since it is particularly related to LID, I think there are many reasons why the token price will rise sharply in the next few months and years.
The first reason why the price of tokens should appreciate is the repurchase and burning of LID tokens. 20% of the LID fee for each pre-sale will be used to buy back and burn LID tokens. As the circulating supply decreases, the price of LID will naturally rise. We have seen this process applicable to countless other cryptographic tokens.
The second reason for potential token appreciation is the incentives for LID stakeholders. Among these incentives, the most profitable incentive may be the airdrop of native tokens. Cryptocurrency investors absolutely love airdrops and usually buy tokens for equity participation in order to be able to participate. As the demand for airdrops increases, the upsurge in buying tokens will make the LID higher.
The last reason is simply the growth of DeFi. In July, the transaction volume of the decentralized exchange was about $3.7B, and Uniswap accounted for about 47% of the total transaction volume. As institutional demand for cryptocurrencies continues to grow, and adoption rates continue to rise, this growth will be amazing. Unfortunately, with the arrival of growth, the number of fraudulent projects will also increase. With each scam, investors will learn and realize that only certified projects can be trusted. The moment of coming to Jesus will benefit the LID protocol, thereby bringing more business and providing further reasons for token appreciation.
Since its inception, cryptocurrency has come a long way. The industry has gradually matured and has made progress in attracting new users. Although the growth is considerable, if the industry implements policies and procedures to eliminate or at least substantially reduce the number of scams that will eventually shake the confidence of potential investors, the growth will be even greater. The Liquidity Dividend Agreement has an excellent plan to achieve this goal. For projects that want to show credibility in the eyes of investors, it is a matter of time before the LID certification must be obtained.