[$LPUSD White Paper V1]
A Peer-to-Peer Launch Pad Liquidity Cash System
satoshi@rootedge.ai
rootedge.ai
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Abstract:
Early-stage startup funding is one of the greatest friction points founders face in the journey to success. Venture Capital firms, angel-investors, grant providers, family-offices, & large firms/corporations have historically taken advantage of the problem that is a founder/team/company funding an idea and furthermore developing/building upon that early-stage product and/or service idea beyond early-stages. LPUSD solves one of the greatest problems founders face starting/incubating a product and furthermore business. Through flywheel mechanism looping, LPUSD provides founders incubating with the rootAI team’s path/products deep liquidity. This mechanic of value flywheeling comes not only through fee accrual, and ‘progressive collateralization’ of LPUSD from fees both associated with LPUSD buys/sells - but through tokenomics design associated with the buying and selling of tokens launched through the white-glove rootAI incubation product/path. These flywheels feed into further fee accumulation from liquidity pools associated/paired to LPUSD. With liquidity pools associated/created continuously as more incubation takes place and succeeds, so too does the proliferation and collateralization of LPUSD. Each flywheel feeds into another, and back again in a loop with APR from liquidity pools both of LPUSD and the underlying collateral associated with the capital being looped into fee production of APR via platforms like Uniswap, Aerodrome, and many, many more providing again, another flywheel effect. Each flywheel strengthens the next and the more velocity, and longer duration of flywheeling (monetary flow) - the stronger the system gets as collateral and returns perpetuate one another. Zero extraction from the system until the initial target of 5,000,000 USD in TVL provides an upwards trajectory and systematic ‘progressive collateralization’. Further explanation on ‘progressive collateralization’ is detailed in this paper.
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Summary:
Understanding funding and equity bleed can be a make or break for a start up is the first reality. Founders/teams are in a position - whether small or large idea and goals, have a choice to make with current systems/solutions that target early-stage startups; Either give up equity, or fund an idea for yourself. Giving up a big chunk of equity, over giving up ‘royalty’ over x, y, and z variables (profit, product, etc.) can break a founder down the line, when their idea becomes something greater than one could have even imagined. Investors (Venture Capital specifically) prey on that reality, where they invest in a founder with terms that aren’t long-term EV for the founder while being extremely profitable as an investment. Solutions in the blockchain space have replaced (in ways) the mechanism of finding value in speculators by adding a fee mechanism within the tokens’ design itself. This provides a way for founders to raise a small (depending on set fees and/or tokenomics directly implanted in said token) amount of capital without giving up equity - other than the token being on market and having less control according to the amount vaulted/held by the founding team.
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Scope:
Not only are we creating solutions and EV systems for rootAI and LPUSD holders/investors - we are solving massive funding problems for early-startup founders/projects. Taking market share from VCs that prey on early-stage startup founders isn’t our purpose, rather the effects of our products, approach, ethos, and mission provide the taking of market share from parasitic business model focused organizations and/or individuals. Ensuring founders are better off than before we launched LPUSD is the goal, and providing users of our incubation product/path with massive value both on the tokenomics related side but the hands-on support side with our incubation products/path is our target mission and the residual effects will stretch throughout the blockchain space and into the tradFI/VC realm.
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Specification:
LPUSD also known as launchpad usd / liquidity provider usd; is a collateralized liquidity token bootstrapped to the launchpad. A % of token rev from launchpad rev/incubation revenue directs to collateralization of lpUSD The token is only allocated to rootAI community via airdrop, and through incubation/grant paths that are to be voted on by rootAI token holders. We will utilize both traditional mechanisms of LPing against LPUSD while also utilizing indexes structured by incubated projects (in the future once incubated projects are enough of a force and ready to be grouped into an index - more to come with the White Paper v2 update in the coming month(s) - to gain yield from said mechanisms. LPUSD utilizes a basket of assets, including USDT USDC WBTC ETH (and more to come with v2 WP release) to gain returns and further perpetuate the collateralization flywheel of LPUSD. LPUSD as mentioned utilizes other stables to gain yield with core safety in mind, fluctuation of collateral is okay, as this isn't a traditional ‘stable’ coin by any form of definition. Maintaining a core level of stable coin holdings in backing LPUSD is essential however. Ensuring that yield can be made through fluctuation/volatility is a EV concept and 25% of the collateral backing LPUSD in its first version will ensure added collateralization due to the speculatory nature of the underlying collateral.
Projects sent through our incubation system/product(s) will be enabled with a set (to be voted on by rootAI holders) amount of LPUSD against their/project token.This mechanic enables a project in its earliest and most fragile state. Deep liquidity provides investors with a safer investment environment. Entering becomes easier, exiting becomes easier, and with both entry and exit mechanisms a project becomes stronger via LPUSD trading and in turn gaining collateral via fees on both the buy and sell side. The allocation will be required to be launched in/on a locked LP via Aerodrome per defined v1 LPUSD White Paper specs. This ensures a project doesn’t jeet, while also ensuring the free market is seeing benefit and stability in said LP being locked for 6 months. Reevaluation and further lock requirements will be project and progress specific and will vary on a project-by-project basis.
Projects that want LPUSD as a mechanism to provide a more palatable investment environment in early-stages while not wanting the white-glove incubation service will need to be in touch with the three founders (all of them) and give a pitch as to why they should receive a LPUSD grant. If they are able to pitch and reasoning successfully to all three founders, and rootAI founders agree to put up a vote - the project will be included in our early governance process and a proposal will be posted by the rootAI CEO, or CTO. rootAI voters will be able to determine if the project should get the grant as the second and final step in receiving a LPUSD grant to add as liquidity in a 6 month Aerodrome lock. The same process takes place after the 6 month lock - and the rootAI team will determine whether the team/project can proceed forward with the LP locked, or unlocked.
Protocols will be able to 'purchase'
$LPUSD OTC from rootAI - however they will be required to meet the collateral required for in progress goal. That means that if a protocol were to want to purchase a supply of LPUSD they will be able to do so our of the 20% discretionary bucket/allocation now, today - they will have to collateralize with the 5,000,000 TVL valuation in mind. This is the only way that any protocol (or anyone really that is interested and screened by all three founders
@rootaichad @cissora @akathesmith) will be able to get an OTC deal on
$LPUSD. This should be a viable and EV way for LPUSD holders and protocols are able to get LPUSD exposure without leaking value, but more-so adding to value for holders and projects involved in LPUSD as a liquidity token/product.
“Progressive collateralization” by definition means the TVL goal of 5,000,000 USD can and will be raised upon successful collateralization in that amount. This means that the ‘end-goal’ of LPUSD is not simply to have 5,000,000 TVL, but to raise the target along with its success and wide-spread adoption as a novel solution and potential replacement to angel investors, VCs, and specifically liquidity grants provided generally by protocol foundations, and the foundation arm of projects proliferating ecosystem/start-up growth. General milestones in place internally are as follows:
- TVL/Collateral Goal #1: 5,000,000 USD in collateral
- TVL/Collateral Goal #2: 10,000,000 USD in collateral
- TVL/Collateral Goal #3: 20,000,000 USD in collateral
- TVL/Collateral Goal #4: 40,000,000 USD in collateral
- TVL/Collateral Goal #5: 80,000,000 USD in collateral
- TVL/Collateral Goal #6: 160,000,000 USD in collateral
further goals and adjustments to strategy including TVL goals, collateralization strategies, burn mechanism technicals/stack, index creation and usage for yield, and more will be released with the LPUSD v2 White Paper.
Airdrop allocation specification:
The pre-airdrop supply circulating is/was 10%;
25% - Airdropped rootAI Holders
20% = Team / Founder Discretion (potentially voted on for incubation participants)
15% -
$LPUSD / base:0x461d3c96d170e551611f54fa466d3d74a680aba3
10% - Builder Fund
10% - Community fund
10% = Liquidity Protocol Integration/grants/misc.
Burn/Collateral Claim Mechanism:
Upon reaching the 5,000,000 USD in collateral goal. The LPUSD burn/claim mechanism will be put in place. This burn/claim mechanism will have a 20% tax applied to it for the underlying collateral. This provides strength for the underlying collateral, with each claim/burn while also giving room for collateral fluctuation re: underlying capital (WBTC, ETH & other majors potentially, including HYPE by Hyperliquid). This claim will have a 24-36 hour window initially where safety mechanisms/checks are applied and the claim/burn is verified. We will never ‘blacklist’ an addy or anything of the sort - the checks are simply to verify the system is not being gamed, and underlying collateral is safe. Further safety mechanisms related to the burn/claim mechanism for underlying token collateral will be announced however the exact safety checks are technically being ironed out for the most effective and streamlined system possible in its first version. The goal is to have an automated system where the wait time is under 1 hour, and even less according to our engineering/security teams audit and approval for said system.
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Conclusion:
LPUSD will shape early-stage liquidity while pulling in investors to the systematic investment realities that are the flywheels involved with funding the collateral behind LPUSD. The mechanism provides the token itself is an index of sorts, where the macro-effect from successfully incubated projects launched provides fees/returns that are placed in the TVL/collateral system backing LPUSD. Beyond the novel application and collateral system of flywheels - the returns from the collateral being put to work as liquidity itself provides not only strength but elasticity with volatility and speculation strengthening the token. Whether going up, or going down LPUSD becomes stronger and stronger. The purpose of this design is to do exactly that for the projects that are involved in and subsequently bootstrapped in/to the system of capital formation. When working together, builders are stronger. This systematically puts that thought into motion via applied, novel solutions to early-stage incubation. V1 of the LPUSD paper, the one that you just read - is not the end, rather its the start. V2 will be something of significance not just for rootAI holders, but the industry that is ‘crypto’. It will change not only the ‘crypto industry’ though. It will send ripple effects throughout capital formation problem/solution concepts. We hope others find ways as we have with LPUSD, to support the builders that are attempting to change the realities that are modern financial instruments.
gROOT & We will post a link to this v1 White Paper for
rootedge.ai shortly.
Back to work & if you want further clarification on any piece of the puzzle for the version posted on
rootedge.ai please let us know and we'll add more to this v1 version of LPUSD's white paper 🫡