Uniswap Buyback Proposal

by Daniel Worsley

Hi everyone,

As you may know, the LCS Q3 buyback and burn will be occurring later this month on September 20. We have had the requests from the community for a more decentralized solution for completing the buyback and we would love to hear everyone’s thoughts on having this upcoming buyback on Uniswap rather than Hotbit.

It is important to emphasize that no decision has yet been made and this poll is simply to gauge the community’s preferences before a decision is made. Once a decision is reached, an announcement will be made giving users who desire to take part in the buyback plenty of notice.

We realize that not everyone will have a great understanding of the differences between the 2 options so we will give a brief introduction to each, and list some of the pros and cons of each option.

What is Uniswap?

Uniswap is a decentralized exchange in the form of two smart contracts hosted on the Ethereum blockchain, as well as a public, open-source front-end client. It's a 100% on-chain market maker allowing the swapping of ERC20 tokens, as well as ETH to an ERC20, and vice-versa. More info can be found here: https://decrypt.co/resources/what-is-uniswap

What is Hotbit?

Hotbit is a centralized cryptocurrency exchange offering trading services among major digital currencies like Bitcoin, Litecoin, and Ethereum. Hotbit has been the exchange used for all past LocalCoinSwap buyback and burns.

Completing the buyback on Uniswap rather than Hotbit

Pros:

  • Uniswap is completely decentralized - no need to trust a platform with your funds
  • No deposit or withdraw limits
  • LCS will have an additional listing and pairing (ETH/LCS)
  • Additional utility for LCS - holders can stake LCS and ETH to earn returns from Uniswap trade fees (including the buyback fees)

Cons:

  • Gas fees could be high at the buyback time as they are currently very volatile. LocalCoinSwap will cover the gas cost of the buyback fees, but users wanting to add liquidity to the pool, or sell LCS will also have to pay gas fees
  • There will likely be higher price slippage as the Uniswap pool will not have as much liquidity. This means a temporarily higher LCS price but less LCS burned.
  • A small fee will be incurred from exchanging the BTC (the main platform revenue) to ETH in order to complete the buyback meaning slightly less for the buyback (<0.2%)
  • Participating in a buyback on Uniswap may not be as intuitive for LCS holders that have only used P2P platforms and traditional centralized exchanges.

FAQ:

Who would provide liquidity to the Uniswap pool?
Any LCS token holder can stake their LCS in the pool. This helps maintain price stability, earns the holder returns, and provides buy and sell liquidity. A portion of LCS tokens from the community venture fund would also be added to the pool to increase liquidity.

How can holders benefit from this?
This provides LCS holders with a vehicle to stake their LCS in the Uniswap pool to earn returns. In addition, it provides a decentralized buyback solution.

Will LCS still be burned?
Yes, if the buyback is completed on Uniswap, all tokens purchased will then be burned as per past buybacks

Can we trade LCS on Uniswap regardless of this?
Yes, LCS is already tradable on Uniswap here:
https://app.uniswap.org/#/swap?outputCurrency=0xaa19961b6b858d9f18a115f25aa1d98abc1fdba8

How do I stake LCS on Uniswap?
You can stake LCS + ETH in the Uniswap here:
https://app.uniswap.org/#/add/ETH/0xaa19961b6b858d9f18a115f25aa1d98abc1fdba8
Note: you need to stake an equivalent value of LCS and ETH at the same time and this will incur a gas fee.


We have created a poll HERE and token holders are encouraged to join the conversation on our Telegram group HERE

We look forward to hearing your thoughts.

Happy trading,
The LocalCoinSwap Team