Community Vote #3 FAQ - Part 1

. 6 min read

In order to ensure that we cover all the questions raised by the community for the upcoming Community Vote #3 - Buyback and Burn model, we have created an FAQ to complement the voting process.  

Make sure you have read the Community Vote #3 Buyback and Burn Model proposal before you get started in the FAQ!

We will continue to update this FAQ as we receive more questions from the LCS community. We will also be holding a live Telegram AMA on Tuesday September 17, 2019, where you can speak directly with the LocalCoinSwap team.  

Resources:

Q) When does the vote begin?

Voting will begin as soon as the LCSV3 tokens are distributed on Friday the 20th of September.

Q) How long will voting be open?

Voting will be open for a total of fourteen (14) days so you will be able to take your time and choose the option that you feel is best suited to your vision of the LocalCoinSwap platform.

Q) How does the voting process work?

The voting process works as follows:

  1. LocalCoinSwap voting tokens (LCSV3)  will be distributed to anyone holding LCS Cryptoshares.  These LCSV3 tokens will be sent on a 1 to 1 ratio. This means that if you hold 1000 LCS Cryptoshares in a wallet, you will receive 1000 LCSV3 tokens into that same wallet.

  2. Once you receive your LCSV3 tokens you will then need to choose which of the 2 options that you are going to vote for. A list of the voting options have been included below.

  3. Each voting option will have a corresponding ethereum address in this blog post below. Once you have selected your voting preference from the 2 voting options you must then send the LCSV3 tokens that you received to the corresponding ethereum address. This will classify as your vote.

  4. After 14 days (2 weeks) we will tally all votes that are sent to the ethereum addresses and a winning outcome will be announced to the LCS community here on our blog.

Q) What are the community’s voting options?

This vote comprises of 2 voting options that the community can choose from:

OPTION 1:  We will transition the LCS token model to a Buyback and Burn model

To vote for option 1, send your LCSV3 tokens to:
0x0000000000000000000000000000000000000001

OPTION 2:  We will retain the current Dividend model

To vote for option 2, send your LCSV3 tokens to:
0x0000000000000000000000000000000000000002

Remember: Do not use your LCS Cryptoshares for voting. If you have any questions, join us in our Telegram channel to chat with a Community Manager or you canattend our live Telegram AMA on Tuesday September 17 to chat with the team.

If the outcome of the vote is in favor of a continuation of the current dividend model (I.e. option 1 is not the winner), then a second vote will need to be held to determine the structure of the dividend model under the non-custodial platform structure. Further details of a second vote will be posted for the community to view once we know the outcome of vote 1.

Q) Do I need to send LCS Cryptoshares to take part in the vote?

No, DO NOT send your LCS Cryptoshares to any of the voting addresses. To vote, you ONLY send the designated LCSV3 tokens which we will send to you. Please be aware that if you send your LCS cryptoshares they will be lost and we cannot retrieve them for you.

Q) Is there a fee to take part in voting?

The only fee, if you are holding your LCS Cryptoshares in a private wallet off the exchange, will be for GAS to pay the miners on the Ethereum network. This will process the transaction like any other ERC-20 token on the blockchain. This fee does not go to LocalCoinSwap.

Q) Will other users know which way I voted?

No one will see your vote unless you share your wallet address with others or tell someone who you voted for. All votes are transparent on the blockchain, but wallet addresses are anonymous.

Q) How will the winning option be determined?

The winning option will be the option with the highest number of votes at the conclusion of the voting period. This option will win outright.

Q) Isn’t this against what is in the WhitePaper?

These updates are not against what is currently documented in our LocalCoinSwap white paper. As per the terms and conditions on page 30:

“Blockchain technologies are subject to supervision and control by various regulatory bodies around the world. LocalCoinSwap tokens may fall under one or more requests or actions on their part, including but not limited to restrictions imposed on the use or possession of digital tokens such as LCS Cryptoshares, which may slow or limit the functionality or repurchase of Cryptoshares or other tokens in the future.”

When the LocalCoinSwap whitepaper was written and the ICO launched, there was little guidance surrounding how dividend-paying cryptocurrency tokens would be treated by regulatory bodies. This clause in the terms and conditions is to ensure that the project can remain compliant in an ever-changing regulatory environment.

Q) Can the team vote?

Yes, as per the voting structure in the whitepaper, each LCS token receives one voting token. As such, both former and current team members may vote as they please with their own allocation of voting tokens.

Q) What will happen to the team tokens in the case of a buyback/burn structure?

The team tokens will remain the team’s tokens. Many team members and advisors worked hard throughout the ICO with little or no pay to help the success of the project.

Q) How will LCS holders know the project is honest about revenue

LocalCoinSwap will continue to release quarterly announcements of fees collected. Volume can still be verified through the metrics page of the LocalCoinSwap P2P platform.

Q) What if I want to keep receiving dividends?

If you prefer the dividend model then ensure that you put in your vote for that model. It is important to note that there will only be one token model and once the vote is complete, the decision is final.

Q) Will the LCS token hold any additional utility in the case of a buyback/burn structure?

The team will continue to explore additional avenues to build out the LCS ecosystem. This may include alternative uses of the LCS token that have the potential to create additional value and network effects.

Q) What will happen with the Q3 dividend as a result of this vote?

The Q3 dividend will not be affected by this vote.

Q) What will happen to the venture fund?

If the vote falls in favor of a buyback/burn model, a subsequent vote will be held to determine the future of the community venture fund. Options for this vote are yet to be determined but may include:

  • A complete or partial burn of the tokens
  • An airdrop to current holders
  • Alternative uses such as community development, prize giveaways etc

Q) Why are only 20% of exchange fees going to be used for the buyback when originally 100% was to be distributed?

In the whitepaper, it was outlined that 100% of profits would be distributed as dividends. This does not equate to 100% of exchange fees. Profits are made only after operating costs are taken out. Operating costs are currently higher than the revenue so there is no profit to be distributed as regular dividends for this quarter.

The quantity and quality of crypto exchanges in the market have increased at an exponential rate since the inception of the LocalCoinSwap project. When supply in any market increases at a higher rate than demand, profits for companies generally decrease. There have been many requests for LCS holders to set a minimum percentage of revenue to be distributed as dividends, irrelevant of profitability in order to more accurately manage token holder expectations.

This 20% figure is inline with other top crypto exchange buyback programs and is a clear figure to estimate returns based on the publicly available volume metrics. It also allows a buffer for further development and maintenance of the platform in this volatile market.

Q) Will LCS holders still be able to vote in the case of a buyback/burn structure?

Yes, LCS holders will still be eligible to vote on various issues surrounding the project. Additionally the community’s feedback will continue to be pivotal in further development of the platform.

Q) How long will the buyback go for?

The quarterly buyback will be ongoing until all tokens are bought back and burned, or a subsequent vote is held to change the token or buyback structure.

Q) How will tokens be bought back? What exchange will be used? Who will choose the exchange? Will it be an order book built into LocalCoinSwap or a centralized exchange such as Hotbit?

The buyback would occur on whatever order book type exchange has the highest volume for LCS. Currently, the highest-volume platform that LCS is listed on is HotBit. Thus if the buyback were happening this quarter, it would be on HotBit. If LCS is listed on another higher volume platform in the future, then the buyback would occur there.

It is important for the buyback to occur on a public order book rather than through P2P transactions for the sake of transparency. LocalCoinSwap will make clear announcements ahead of time on the timing and platform of the buyback.


If you have any questions about the voting process, we encourage you to head over to our Telegram channel to chat with our Community Managers. We will also be holding a Live Telegram AMA on Tuesday September 17, so that the LCS community can chat directly with the LocalCoinSwap team.

As always, we would like to thank the LCS community for their ongoing support, contributions and feedback.