A lot of people have been asking about why we’re running an uncapped token sale etc. We want to clarify what our Market Validation Mechanism (MVM) means for token holders.

Is there an unlimited supply of tokens?

No. While we don’t have a cap during our Token Generation Event (TGE), the tokens generated during the TGE will be the only Lif tokens in existence. So this makes the token as a currency a deflationary currency, as no more tokens will ever be created. However, during the TGE the market will decide how many Lif tokens will be generated, and during those two weeks, there is no cap on how many can be issued.

Why run an uncapped sale?

To make a TGE fair and avoid it being abused, we want to guarantee that any one who wants to participate can do so, and that the project is as decentralized as possible which is achieved by having as many people as possible participate. We want to avoid the TGE closing after just one block, like we’ve seen numerous times, as this doesn’t allow everyone to participate in the sale. By having a capped amount large buyers aka whales can also buy up large portions of the total supply.

With a uncapped sale which runs over two weeks everyone has time to participate and there is no FOMO rush. And for whales, the more they buy the more they increase the total supply thus don’t accumulate as much of a percentage share as they could in a capped system.

So what are you going to do with all the money?

The maximum we will receive is $10 Million. Although the number of tokens issued is uncapped, we will not receive all of the money raised during the TGE. The excess money will go into a smart contract which buys back Lif tokens from anyone and then destroys the Lif tokens it bought back. If total funds raised exceed $40 million the the MVM will run for four years, otherwise for two.

If we raise $100 Million the scenario will look as follows:

$10 Million will go to the Winding Tree team

$90 Million will go into a smart contract which buys back Lif tokens.

In this case since $100 Million worth of tokens were sold and the buy back smart contract has $90 Million. Tokens will be purchased back at almost 65% of the TGE value.

In this scenario the smart contract would vest over 48 months. And release a small amount to the Team every month if it still has money in it. Every time someone sends their Lif tokens to the contract this drains the contract’s funds. This way the market can decide whether or not the team should receive more funding. This is why we call it a Market Validation Mechanism.

This is how the price would decrease over a 2 year schedule:

MVM Primer. N = $100M Raised (calculator)

What determines token price for TGE?

The price to buy Lif tokens during TGE (Token Generation Event) is set arbitrarily and merely acts as the mechanism to exchange X amount of ETH for X amount of Lif. We could have set 1, 100, 10000 as the price and it wouldn’t matter, because the actual value of Lif will be determined by the outcomes of the TGE based on generated supply. Also, there is nothing that stops you from investing fractions of ETH, say 0.00001 ETH.

Please note the USD fluctuations have absolutely no impact on the issuance of Lif. Whether Ether is $1 or $100000000 the TGE rate will always be 1 ETH = 1000 LIF first week of February / 900 LIF second week of February.

We generally advise to focus on market capitalization vs. the price as per good investment practices.

What determines token price after TGE?

For the duration of TGE Lif is pegged to ETH. After TGE the supply of tokens will be fixed and no longer pegged to ETH. The price will be determined by supply and demand.