$LT Basics

What is $LT

$LT (Light Token) is the single utility token of the HOPE Ecosystem that aims to power all protocols within the ecosystem. It incorporates time-weighted voting and value accrual mechanisms for both governance and incentivization.

What is the purpose of $LT?

The main purpose of $LT is to incentivize liquidity providers throughout the HOPE Ecosystem in hopes of attracting as many users as possible to participate in the governance of the HOPE Ecosystem.

How to get $LT?

Liquidity providers can receive $LT by participating in liquidity mining, which starts with staking $HOPE and extends to future next-generation financial protocols, such as HopeSwap and HopeLend, among others.

In addition to participating in liquidity mining, $LT can also be obtained directly from HopeSwap.

What is the utility of $LT?

$LT is the single utility token in the HOPE Ecosystem with multiple functions. It serves as the incentive token for participants and the governance token for LightDAO, the buidler of the ecosystem.

You can find out what to do with $LT by clicking below:

pageUnderstanding $LT

What is the underlying value of $LT?

$LT Value ≈ Call Option on BTC/ETH + The partial DCF of the DAO's revenue + Additional Upside of the Ecosystem.

The appreciation in value of the HOPE Gömböc will accumulate to $LT holders once the market value of $HOPE reaches face value (i.e. achieving peg).

As a result, the $LT tokens can be considered similar to call options on BTC and ETH reserved in the HOPE Gömböc with an infinite maturity.

Therefore, we can estimate the current market value of $LT by calculating the call option's premium using the Black-Scholes model. The formula is as below:

C=SN(d1)KertN(d2)C = S \cdot N(d_1) - K \cdot e^{-rt} \cdot N(d_2)

where d1=ln(SK)+(r+σ22)tσtd_1 = \frac{\ln\left(\frac{S}{K}\right) + \left(r + \frac{\sigma^2}{2}\right)t}{\sigma \sqrt{t}}, and d2=d1σtd_2 = d_1 - \sigma \sqrt{t}.

TermDefinition

CC

call option premium

rr

risk-free interest rate

tt

time to maturity

σ\sigma

volatility of the asset (BTC and ETH)

NN

CDF of the normal distribution

SS

spot price, the price of BTC and ETH when $HOPE launch

KK

strike price, the price of BTC and ETH when $HOPE reaches peg

This approach captures only the "beta return" part, while the "alpha return" part remains unpriced and is expected to be derived from the thriving ecosystem.

In summary, the underlying value of $LT is approximately equal to the call option premium of BTC and ETH plus the additional upside of the ecosystem.

What is $LT vote locking

veLT stands for vote-escrowed $LT, it is simply $LT locked for a period of time. The longer you lock $LT for, the more veLT you receive.

$LT holders can receive veLT by vote locking their $LT.

Vote locking $LT allows you to vote in governance, boost your $LT rewards and receive fees generated from the ecosystem.

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