There exists a smart contract on Ethereum mainnet that has no owner, but currently holds 32 ETH and slightly more than 1300 of what may be the most based NFT character currently making moves onchain. That man is known as The LP. He's slightly overweight, he's made out of pixels, he's known to rock a unicorn floaty, but he's well funded, trustless, and always making moves. So it's only fitting that there be a new version of this system deployed to the Base blockchain with enhanced mechanics and the introduction of "The Next 100x Memecoin on Base" or $TN100x for short. We'll get to that in a moment, first lets talk a bit about the original version...
The LP Version 1 (Aka OG version)
At the time of this writing it was 466 days ago that The LP version 1 was deployed to the Ethereum blockchain. So what was it, what is it, what was it trying to solve? It was deployed by me. I go by the name of Deployer online and my current PFP is a green Wassie who I have come to identify with. I've been in the NFT space since 2017, built one of the first NFT marketplace and infrastructure tools, probably one of the few that have been acquired by a top crypto exchange. I've written a lesser known, but widely adopted ERC standard and have launched various NFT experiments and projects.
Smart contracts are powerful, very powerful. You can do things that weren't really possible before. Smart contracts can guarantee trustless functionality. The power of smart contracts are underutilized in the NFT scene. Many projects just use popular ERC-721 contracts from OpenZeppelin or the ERC721a team and call it a day. I wanted to create something that would lean into the trustless, decentralized nature of Smart contracts. I had several goals in mind:
De-risk the mint for potential collectors
Provide instant buying and selling functionality
Reward holders and showcase a way to collect built in fees (royalties)
Let's dive into to each one of these topics in a bit more detail.
De-risking the Mint
Have you ever minted an NFT only to find out that the project never sells out or gains any traction? That's an unfortunate scenario for both the project creator and the collectors. For a creator they've typically spent a good amount of time thinking about and creating the project. After spending hours upon hours building something only to see it fail is not a good feeling. And for collectors, you spend money on an NFT and sure, maybe you just like it and thats fine, but if you had any hope of the NFT having future value you can probably forget about that.
My solution to this was to do a dutch auction combined with trustless escrow that lasted for a pre-determined amount of time (for version 1 this was 11 days, for version 2 it will be 24 hours). Let me explain what I mean by this. The price of the mint started at a higher price and decreased over the 11 day period. When someone minted during this time the funds and the NFT(s) they minted were held in escrow, directly in the smart contract. Nobody could move them. The NFTs and the funds were essentially frozen on chain. This would be the case until the project sold out (signaling interest) and if the project did not sell out within that 11 day period then people could withdraw their funds. They would keep their NFTs but they would remain locked to their wallet forever - a badge for participating in a failed experiment.
However, this scenario did not happen. The project did sell out and the NFTs were unlocked. So what happened next? A pool was instantly created once the last NFT was minted to enable instant buying and selling. Using ERC-2309 1,000 additional NFTs were minted all at once. Those NFTs and half the mint proceeds were added to the pool.
Instant Buying and Selling
When the last LP NFT was minted half of the mint proceeds and an additional 1,000 NFTs were added to a pool. If you're not familiar with the concept of pools, a liquidity pool, in the context of Ethereum and NFTs, is a collection of assets locked in a smart contract that facilitates trading by providing liquidity. In simpler terms, it's like a big digital pot where people can exchange assets. In our case the assets are ETH and LP NFTs. If you recall, the mint proceeds were held in escrow, so there was no person in charge of creating this pool. The pool was created via code and collectors didn't have to trust that this pool was going to be created. Think about that for a second. This is a financial system the facilitates the exchanging of well-funded, slightly overweight characters with ETH and there was no middleman and no way the system could be compromised or rugged. Pretty incredible technology we have here.
So what does this pool do? What happens when someone buys or sells? A buy price and a sell price is calculated based on the number of NFTs in the pool vs the amount of ETH. I won't go into how exactly but it's relatively simple. The more people buy the NFTs the more ETH there is in the pool which increases the buy and sell price. The more people sell the more NFTs there are in the pool which lowers the buy and sell price.
This was another way of de-risking the mint. If you wanted to exit you could. The liquidity is there. You could and still can sell your LP NFT directly to the pool for the current sell price.
Rewarding Holders and Collecting Fees
I created the LP during maybe the second or third round of the NFT royalty debate. If you are not familiar with this debate, basically creator royalties were touted as a major selling point of NFTs to artists. The story went that you could collect royalties from secondary sales in perpetuity and NFTs just did this for you out of the box. Sounds great, right? Well it was never true. Royalties, for the most part, are enforced at the platform level. And when Blur hit the scene and didn't enforce royalties other platforms followed suit.
The LP has a built in mechanism which takes a small fee on both buys and sells. These fees could have been programmed to go anywhere (ie programmable royalties enforced at the smart contract level) but I programmed them this way: 1/2 of the fee went back to the holders of the NFTs and the other half when back into the pool.
Time for The Based LP
If you're still with me hopefully by this point you have a general understanding of the mechanics of the original LP project. The Based LP is version 2.0 and will be deployed on the Base network. It's larger than an NFT project. It's one part social experiment and one part cutting edge tokenomics. The social side is happening in the /lp channel on Warpcast. Like smart contracts, the decentralized social network, Farcaster is incredibly powerful. Warpcast is a client built on top of Farcaster. When data is open and freely available people can do incredibly interesting and creative things. That's what we are seeing on Warpcast. Using the open data from Farcaster I've created Community Points leaderboard using data from the LP channel. People earn points by contributing to that channel. These points will be used to calculate a percentage of your $TN100x airdrop eligibility. Now think about that for a second - building community points on top of decentralized data using an ERC-20 token on Base. Wow! This is the future.
So what's different between the OG LP project and The Based LP? Here's the list:
Introduction of $TN100x aka "The Next 100x Memecoin on Base" an ERC-20 token on Base
A major change is the introduction of $TN100x aka "The Next 100x Memecoin on Base" and ERC-20 token that will be deployed on Base. Tokens are an incredibly powerful way to reward holders and so The Based LP wouldn't be complete without one. The future of rewards on the internet are tokens.
Burn The Based LP NFT for $TN100x
A completely new mechanic will be added to The Based LP and this is the ability to burn your Based LP NFT for a set amount of $TN100x. Each Based LP is backed by $TN100x and you can burn that NFT to redeem the token. This will introduce an interesting dynamic to the project, because the pool will still exist and you can buy and sell your Based LP for ETH, or these Based LP NFTs can be burnt for $TN100x which decreases the supply of the NFTs and in theory would increase the buy/sell price of the pool.
1,950,000,000 $TN100x will be deposited in the Based LP smart contract to support burn to redeem functionality.
SudoSwap to facilitate NFT liquidity pool Uniswap to facilitate $TN100x pool
The pooling mechanics are similar expect this time I am using SudoSwap to create the NFT pool. They just launched on Base and I think it's great to collaborate with other builders in the space. The ETH/$TN100x pool has be created on Uniswap.
This time there will be 100 minted directly to the SudoSwap once the public sale mints out and the amount of ETH added to the pool will be determined by the final sell price.
All proceeds go to the pools
All the mint proceeds will go to creating the SudoSwap and Uniswap pools. The amount of ETH added to the SudoSwap pool will be determined by the final sale price and the rest will go to Uniswap to back $TN100x.
Refunds on dutch auction price difference
You will be refunded the price difference of the price you pay to mint vs the price the project sells out for. For example if you mint at the beginning of the dutch auction for 0.25 ETH and the last Based LP NFT is minted for 0.05 ETH then you will be able to re-claim the difference (minus gas fees).
48 hour mint time
The Based LP dutch auction will last for 48 hours. And similar to version 1 proceeds and NFTs will be held in escrow and if the project doesn't sell out then that's the end of the experiment.
Ways to Participate in $TN100x Airdrop
Own OG LP NFTs www.thelp.xyz
Own The Based LP NFTs (not minted) based.thelp.xyz
Participate in the /lp channel on Warpcast
Tip on Warpcast using $LP
The first airdrop is complete. There will be more airdrops in the future.
