In the 18th century, Richard In the 18th century, Richard Cantillon explained in his book, Essay on the Nature of Trade in General, that the richer you were and the closer you were to the King, the more you would benefit from the printing of money by the state. On the other hand, the poorer you were and farther away from the King, the more you would be penalized by this printing of money in mass. This would later be observed as the Cantillon Effect.
The Cantillon Effect denotes the change in relative price resulting from a change, usually an increase, in money supply. The change in relative price occurs because the change in money supply has a specific injection point and therefore a specific trajectory through the economy. The first recipient(s) of the new supply of money are in the convenient position of being able to spend money before prices have increased. On the contrary, whoever is last in line receives his share of new money after prices have increased.
This effect explains how supposedly in the greatest economy in the history of the world, 40% of Americans can’t afford an emergency above $400. It also explains why the stock market is rallying on news of record unemployment.
And that’s because, per the Cantillon Effect, the greatest economy in the history of the world produced wealth for those closest to the Federal Reserve, the spigot that greases our financial markets with liquidity. The Fed’s balance sheet grew from $800 billion to $3.8 trillion from 2008 until 2018 as a result of its quantitative easing, or what we cranks call “printing money,” the Fed’s practice of buying assets from banks to bail them out when money is tight. In 2020 alone, the Fed’s balance sheet has grown from $4 trillion to $6 trillion.
Bitcoin’s new supply is rewarded only to the individuals or entities called miners. The role of miners is to secure the network and to process every Bitcoin transaction. Miners achieve this by solving a computational problem which allows them to chain together blocks of transactions. For providing this service, miners are rewarded with newly minted Bitcoins and transaction fees (injection point). Miners then have the opportunity to sell their Bitcoin rewards to the market, which are subsequently purchased by investors/speculators. This value stream causes a disparity in wealth, or as the saying goes, “the rich get richer.”
Until now, digital assets like Bitcoin have required participation in mining or staking in order to receive a portion of the inflating supply. This has several problems:
● When a digital asset is tied to a consensus mechanism, it disproportionately punishes holders as their share of the supply is continuously diluted during the inflation period.
● The long term value of these assets depends heavily on the ability of the protocol to continue to operate without inflation being paid to miners/stakers, which is a highly debated topic.
● Protocol coins (BTC, ETH, etc) are tied to the underlying network, which can cause their value to fluctuate wildly due delays in network upgrades, bugs, etc.
● Assets that require actions such as staking in order to receive a portion of inflation prevent them from being used easily in other applications (lending, collateral, etc.) without being diluted.
The LTL protocol takes responsibility only for essential distribution functions, allowing the Ethereum network to manage everything outside that scope.
Our protocol allocates inflation to all holders of the LTL token. There is no mining hardware needed, no minimum amount of stake required, and no need to lock LTL tokens into a contract. If an individual owns and holds 1% of the entire LTL supply, they will always own 1% of the entire LTL supply (barring they do not accumulate more LTL via exchange purchases, transfer from external sources, etc.). The equal, non-dilutive distribution of inflation amongst all holders of LTL culminates into a fair and decentralized store of value to be used across many DeFi applications.
LTL is a protocol that establishes an Ethereum based self-distributing token (LTL). It is designed to facilitate token distribution without dilution. The protocol distributes inflation of LTL tokens to all addresses holding it without the need for a single transaction. Inflation happens daily and does not require any action on the side of the LTL token holder or any other parties. This method of inflation allows for the token to be applied to modern DeFi use cases without diluting the token holders.
Over a period of 10 years, inflation is reduced and ends with a capped supply of LTL tokens.
LTL is designed to be completely free from the possibility of supply manipulation. Once the contract is launched, no one has any ownership or control over it and the contract will continue to work in perpetuity without any interaction.
LTL token and its distribution are governed by Eras. At the end of each Era the inflation rate is halved. The first era, called the Genesis Era, lasts for 60 days. After the Genesis Era there are 10 additional Eras, each lasting for 365 days.
The daily inflation applied to the LTL token supply starts at 1% during the Genesis Era and is halved at the end of every Era.
The initial supply of LTL tokens is 1,000,000. As inflation is applied across the different Eras, the supply of LTL tokens will increase as shown, ending with just under 10,000,000 tokens.
There is no pre-sale or ICO for LTL tokens. The protocol is complete at launch and LTL tokens can be obtained from the liquidity pool on uniswap. Initially 40% of the total supply will be used to create the liquidity pool. The remaining 2% of the Uniswap allocation will be sold to the liquidity pool over the course of the Genesis Era.