Decentralized finance is evolving at a rapid pace, with new and innovative protocols coming out every week.
If you are here it’s likely because you have heard about Louverture Finance, and you want to know how you can buy $LVT and create nodes that generate reliable passive income.
This guide will cover what Louverture is, some strategies you can use in order to maximize your ROI, and what we can expect in terms of the team and their roadmap. For those new to the Avalanche ecosystem, I will also provide a clear tutorial on how to get your funds there as easily as possible.
Is Louverture Safe?
The first question you are probably wondering is whether or not Louverture is actually a legit project. Are your funds safe?
It’s worth mentioning here that there is no such thing as a guarantee in crypto, especially when it comes to newer projects.
The DAO, OHM fork, and Node scene has been plagued by scams and rugs. As new projects continue to release in order to capitalize on hot crypto trends, inevitably there are going to be a few bad apples.
There are some early indicators that the Louverture project is legit however:
- Not just another RING fork. Unique features means actual thought went into the protocol.
- Extremely proactive team that has addressed small issues promptly.
- Team is already seeking out additional devs.
- Team is in the process of getting an audit with CertiK.
- 3 members of the team recently did an AMA with Cryptonairz.
- 5 year locked liquidity. This means that you will always be able to cash out your tokens in case of an emergency.
- The team is looking into doing 3rd party KYC with either Rug Doc or Assure.
Of course, this by no means signals that the project is “rug proof” or 100% legit. However, compared to other crypto node projects and new projects in general, there are plenty of good signs here. That the team has been so competent and engaged with the community is huge, and a strong indicator that Louverture is headed in the right direction.
What is a Crypto Node?
The hype surrounding “nodes” began with $STRONG (Strong Block), a nodes-as-a-service project on Ethereum that essentially allows you to invest in the support of the blockchain and earn lifetime rewards per node. This is one of the only “true” node projects out there.
Many of the new crypto projects using the term “node” are actually just a different kind of DeFi protocol, where instead of staking tokens, you give them away forever into a collective treasury, where the rewards are then redistributed in some way to the node owners.
This is a generalization of course, but the game theory behind these projects rests in the fact that permanent investments in the form of nodes creates stability and trust, as well as an ever-expanding treasury with which to perpetuate rewards.
It sounds like a winning formula, but many of these projects have been met with crippling issues. The original contracts many of these node protocols relied on were buggy and inefficient, forcing 2nd and even 3rd versions of the contracts, crazy migration scenarios, and even the abandonment of contracts in favor of new ones, much to the dismay of their respective communities.
Where Louverture differs is that so far, it appears as if their initial smart contract had at least some reliable development behind it. There were some early issues with $AVAX gas on the first day that has since been corrected. As the platform expands, it will be interesting to see if the contract holds up or if a true v2 will be necessary.
How do crypto nodes work?
Like most node projects, when you make a node with Louverture tokens ($LVT), you cannot retrieve those tokens ever again. It is a permanent investment into the protocol for the sake of enjoying the lifetime high APY, in this case about 15% a month.
Where Louverture differs is that instead of being forced to purchase a node with a set amount of tokens (usually with a steep upfront investment cost), here you only need 100 $LVT to start out, which at the moment comes out to roughly 1 – 2 USD.
This protocol claims to be a kind of Defi as a service system, so there is a high likelihood that the treasury will be put to work on the behalf of the investors, in order to support the APY long term, not unlike what Wonderland ($TIME) is doing with their treasury. However, it is clear based on the vision of the lead dev, that the project will be investing in other projects, sort of like a launchpad, where node holders will benefit from the potential gains that these projects make.
Once you create a node, you will be able to view its creation date and value in USD on the Louverture.finance dashboard, as well as your pending rewards.
How to Create a Node on Louverture
Creating your first node is easy.
- First, make sure that you have plenty of $AVAX in your wallet for gas. I always keep at least .5 $AVAX around, and I never encounter any issues across the Avalanche ecosystem (Trader Joe, Wonderland, Abracadabra, etc.)
- Next, you will need to trade some $AVAX for $LVT on Trader Joe. I recommend using the “Buy $LVT” button located on Louverture’s dashboard. When dealing with new tokens, always TRIPLE CHECK that you are interacting with the right contract and that you are trading for the right token.
- Now head over to the Louverture dash and scroll down to the “Create a Node” area. First you will need to approve the contract. You only need to do this once, the first time you are interacting with the protocol. This gives the contract permission to spend your $LVT and should cost a small amount of gas.
- Once you get a notification from your wallet that the transaction succeeded, you can create a node. To do so, simply add a name and the desired amount of $LVT. In Louverture, you are not restricted with how big or small you can make a node. It only needs to be at least 100 $LVT, which means anyone can make one. This super low barrier to entry is one of the reasons behind Louverture’s early success. Just remember, you will make roughly .5% a day ROI in rewards based on the initial amount of $LVT you use to create your node. So $1000 worth of $LVT will generate about 5 dollars a day, and so on.
- Click “Create a Node” once you input the Node Name and Amount of Tokens. Once the transaction goes through, you will be able to view your node under the My Nodes section.
As far as new node projects go, Louverture really seems to have simplified and streamlined the process. Anyone can create a node of any size that fits their budget, and while the APY is very high, it’s not anything too outrageous or cheesy like we have seen in many OHM forks and node projects recently. Over time, this could turn into a premiere passive income play in the Avalanche ecosystem right along other blue chip projects like Wonderland.
Compounding and Node Tier System
Where Louverture truly stands out compared to other node protocols is in its first-of-its-kind compounding system.
With other node systems in other projects, you are forced to purchase a node with a set amount of tokens and that is that, the returns on that node will be the same forever.
Not so with Louverture. This protocol allows you to reinvest your rewards straight back into the same node, thereby adding to your initial investment.
This alone would be an innovative concept that is sure to catch on and create Louverture forks down the road.
However, there’s an even greater aspect to this node protocol that has created low selling pressure, contributing to a rapid increase in the value of the $LVT token.
That would be the unique tier system that is tied to the ability to compound.
As stated in the whitepaper:
“To incentivize compounding, a multiplier is added on top of your node, and increases each time you compound. The rewards are based on the value of your node + your multiplier.”
Thus every time you use the Compound button to reinvest into your node, not only are you stacking more $LVT tokens onto your initial investment, your rewards are accruing faster due to the addition of a multiplier.
- Beta: 1 – 5% Bonus (Each time you compound increases your bonus by 1%)
- Delta: 5 – 10% Bonus (Each time you compound increases your bonus by .5%)
- Alpha: 10 – 20% Bonus (Each time you compound increases your bonus by .1%)
- Sigma: 20 – 30% Bonus (Each time you compound increases your bonus by .05%)
- Omega: 30 – 40% Bonus (Each time you compound increases your bonus by .01%)
This means that as you reach the higher tiers, you get a better bonus but it also becomes more difficult to reach the next level. It’s an excellent gamified system that rewards long-term holding and compounding.
Best Louverture Node Strategies
In Defi, strategies abound, as there are so many potential ways to maximize yield based on how much you are investing, your risk tolerance, and so on.
The big question with Louverture is, how do you best take advantage of the fact that you can create multiple nodes of any size?
Is there even any benefit to having more than one node, or is it better to just create one giant one?
First, inevitably as the protocol expands, most users will wind up with multiple nodes. This is simply due to the fact that you cannot add new $LVT tokens to an already existing node.
In terms of maximizing your yield, there is technically no direct advantage to having multiple nodes, especially once you start factoring in the multiplier bonus.
However there are certainly solid reasons to make more than one node.
For instance, you can use one node for compounding and one for cashing out. You could then cash out from the one node and reinvest in the other, or let that $LVT stack until you can make a brand new node of an even greater size.
Another strategy would be to incorporate the wealth of DeFi options Avalanche has to offer, in order to spread your assets and dilute your risk.
You could, for instance, create a node specifically dedicated to increasing your $TIME stack. Once a day you could cash out your rewards from your Louverture node and convert them to $TIME, to put into Wonderland.
Another option would be convert all of your rewards from one node straight into $MIM or $USDC.
When building a DeFi strategy, think about how you can mitigate risk. You also want to consider taking profits, but always remember that in a protocol like this, compounding and patience will pay off a lot more in the end. You might want to bite on selling a pump, but you could be throwing away potential gains.
There is a lot of room for creativity here, however the consensus right now seems to be one node for compounding and one node for cashing out. As your first node maxes out its multiplier, it will make sense to start taking rewards from that and pooling them to create another node. It is up to you whether to make this another cash out node or to go for another max multiplier.
Clearly if the protocol remains stable and continues to offer at least a .5% daily ROI, investing right now will pay off incredibly over the long run.
Current Market Cap and Protocol Growth of Louverture
A crypto project needs more than a based team and great tokenomics to succeed. There needs to be a straightforward plan that results in prolonged growth.
Louverture has already doubled its market cap overnight, as it now sits around $10 million, with plenty of room to grow.
Once the team begins to use the money invested into the protocol on DeFi strategies across Avalanche, we will be able to get a better picture of the long term health of the protocol and how sustainable it is.
Right now it appears as though it has the perfect combination of low barrier to entry, freedom (create nodes with any dollar amount, compounding how much you want, how often you want, etc.), a great community, and great branding. That Avalanche has weathered this Nov-Dec bear cycle rather well is also a strong indicator of where this platform could go, as the entire ecosystem could explode in 2022 along with other quality Layer 1s like Fantom.
For more information on how Louverture works, please read the docs.
Buying $LVT Step by Step
New to Avalanche? Follow these simple steps to get your Louverture tokens as fast as possible.
If you are first researching Avalanche, you may be turned around a bit by the different chains (X-chain, C-chain, etc.).
You don’t need to get too bogged down here. Luckily, Coinbase supports the Avalanche C-Chain, which is what we need. You can purchase $AVAX directly on Coinbase without having to worry about any kind of bridging or other shenanigans.
- Purchase $AVAX with your currency or crypto of choice.
- Once your tokens are ready to send, go to the Send / Receive tab and input the amount of tokens you want to send.
- Open your Metamask wallet and copy your wallet address.
- Paste into the To field on Coinbase.
- Hit Continue.
- Confirm your transaction. Avalanche is fairly fast, you should receive your tokens in a few minutes or less.
- Head over to the Louverture dashboard.
- Click on Buy $LVT. This will take you to Trader Joe, and will import the token for you.
- Purchase your $LVT with $AVAX, but remember to leave more than enough for gas. All transactions on Avalanche require $AVAX.
Simple. Even if you are a complete newbie to the Avalanche ecosystem, onboarding and purchasing $LVT is incredibly easy.
Once you have your $LVT tokens you can then create a node.
Happy nodinggg 🚀
The founder of Digital Sages, Matt has an extensive background in self-mastery and has authored several books on the subject. His goal is to demystify important esoteric subjects and help people transform their lives through self-awareness and personal empowerment.