Louverture Finance is getting a significant upgrade. Their new whitepaper reveals an intricate gamification system that involves NFT nodes, an RNG tier system, and the ability to merge nodes as well.
Confused? Don’t be. This guide will help long-time Louvers and brand new investors alike familiarize themselves with the way these nodes work and how you stand to gain from them.
What is LVT 2.0?
Originally, Louverture was an innovative DaaS (Defi as a Service) node protocol that offered custom node sizes and compounding. LVT 2.0 improves on this concept, and is a brand new smart contract built with better tokenomics, gamification, and NFT support.
- Is there a new Louverture token?
Yes. You will have the ability to migrate your v1 tokens to v2.
- How to Migrate From LVT 1.0 to LVT 2.0
This is a 1 click swap available on the Louverture dapp.
- How much will the new LVT token be worth?
Ultimately the market decides token price but you can expect a similar price at the start comparable to where LVT was at before the migration began (~2 million MC).
- What about pending rewards and the tokens in your wallet?
Those will carry over to LVT 2.0.
- Will all of your previous nodes become NFTs?
Yes. All LVT 1.0 “legacy” nodes will become Black Hole NFTs once you migrate over.
What Are Node NFTs?
So what exactly is a “node NFT” anyway? If you are deep into the node scene, you will likely already know that this is the direction the entire space is headed in.
Originally, nodes were a lifetime commitment. You provide x amount of tokens to the protocol in exchange for lifetime rewards.
Sounds simple on the surface but overtime this system reduces buying pressure on the token and also locks people in forever. In crypto, being able to be flexible with your investments and have multiple options is important, so this is where NFT functionality comes into play.
By creating a system where your nodes are tradable on an open NFT market, it increases their utility, thereby improving buying pressure and also giving investors an “out.” It is also beneficial for buyers who are looking for larger or rarer nodes without having to go through the trouble of compounding.
Where LVT 2.0: Rise stands to make waves is in the genius way these NFT nodes are executed. The new system achieves multiple things at once:
- Constantly feeds the treasury with taxes and royalties, thereby maintaining the health of the ecosystem.
- Nodes can be merged in order to create nodes with a higher yield.
- Orbs, the best nodes, can be “melted,” or broken down in exchange for LVT tokens, giving investors another out and increasing the gamification aspect.
- A true RNG system that ensures constant buying pressure on the token, because you can’t just endlessly compound in order to get the best nodes.
LVT 2.0 will feature 3 distinct kinds of node NFTs, each with their own tiers and subcategories. If you read the whitepaper and are left feeling a bit confused by this new system, it’s understandable. The original LVT system was very simplistic by comparison.
However, after you dig into this new system a little, you will see that it’s not nearly as complex as it might appear at first glance.
The first kind of node NFTs available in the new Louverture ecosystem are known as Black Holes. These serve as LVT 1.0 legacy nodes.
Once the migration occurs, all of the old LVT nodes will be converted into Black Holes, regardless of size or bonus tier.
Black Hole NFTs will pay out at flat .5% a day, which is what LVT nodes always paid out before bonuses were applied. However, these nodes no longer have any bonus tiers, so compounding only increases the size of the node. There is no bonus multiplier.
Compared with the functionality of the new Elements and Orbs, you might assume that Black Holes don’t serve much of a purpose. When you take a look at the ecosystem as a whole though, you realize that this was the perfect solution that would both provide value to all the OG noders and also ensure the long term health of the protocol.
What’s great about the Black Hole NFTs is that you will be able to use the rewards from them in order to participate further in the new ecosystem, or sell them. Alternatively, you can compound them and claim the rewards periodically as you have always done for a reliable source of passive income.
Something worth noting is that anyone can still create one of these Black Hole nodes, and the cost will still only be 100 LVT. This maintains the low barrier of entry, “nodes for the people” angle that Louverture is known for.
Black Holes are also able to be merged, so if you are one of those people that has a dozen small nodes that you wish you could combine, LVT 2.0 will accommodate you.
Elements are a new kind of node and the first part of the core of the new LVT 2.0 experience.
There are 4 different kinds of Elements: Meteorite, Titanium, Dark Matter, and Cobalt, each of which cost a minimum of 25,000 LVT tokens.
Every Element possesses an RNG-based rarity: common, uncommon, rare, epic, legendary, and mythic. The latter rarities are the most difficult to forge but will help in the creation of better Orbs.
There is a major gamification aspect to the Elements. You need one of each type of Element in order to create an Orb, which are the best and highest paying nodes that Louverture offers. However, in order to obtain a high-quality Orb, you may have to go for several attempts at landing a rare Element.
However, you don’t necessarily have to work towards an Orb. Elements themselves can be compounded and pay out a steady .6% per day flat reward rate.
Elements have compounding tiers, but these do not affect reward rate. Rather, they are part of the gamification system used in the merging process.
Every time you compound, your compound count goes up. up to 5 compounds is Tier 1, up to 10 is Tier 2, and up to 15 is Tier 3. Since you can only create Orbs from Tier 3 Elements, you will need to compound your Elements for a minimum of 15 days in order to merge them.
Something interesting to note about Elements, you can claim from them and they won’t lose their Tier (because this is part of the gamification system and has nothing to do with reward payout). Therefore you can compound to Tier 2, take some rewards for a few days, then continue to compound in order to get an Element that is eligible for fusion.
Elements of course are also NFTs (incredibly good looking ones at that), so you are free to trade and collect them on the open market as you wish. Higher rarity Elements will likely demand a high price, so forging one of these is definitely worth it, whether you are just trying to flip NFTs for profit or if you are trying to create a high-APR orb.
This is where everything comes together in Louverture 2.0. Orbs are the hardest nodes to obtain, but have a minimum reward rate of .7% a day and can pay out as high as 1.45% if they are of Legendary rarity.
This puts Orbs among the most lucrative nodes in all of Defi, at least as far as sustainable protocols are concerned.
An Orb’s rarity (and subsequent reward rate) is determined by multiple RNG (random number generator) calls. The rarity is heavily influenced by factors such as the size of the Elements being used and their rarity as well. In other words, 4 100K Mythic Elements will have a much better chance at yielding a Legendary Orb than say, 4 30K Common Elements.
The system encourages multiple tries at obtaining an Orb through classic gamification principles. Those who really want the highest paying nodes are going to want to purchase a multitude of elements, because they are not guaranteed to forge ones of the best rarities every time. The fact that node size also plays a role means more people will be compounding and noding up with larger sums of LVT, which in turn puts more money into the ecosystem and feeds the treasury.
Orbs have a few other special qualities worth mentioning.
The reward payout of your Orb is determined at the time of forging and cannot be changed through compounding. So while it is possible to compound an Orb, you will not necessarily benefit from an increased base APR by doing so.
This means that in order to ensure that your Orb pays out as high as possible, not only do you want to make sure your Elements are of high rarity, but of suitable LVT size before merging. You are going to want to start out with plenty of LVT in each Element, or compound until you are satisfied with the size.
So what is the point of compounding your Orb if it doesn’t affect payout?
Orbs have “tiers” just like Elements, with the same naming conventions of the bonus tiers from LVT 1.0: Beta, Delta, Alpha, Sigma, and Omega.
These tiers are used to determine the amount of LVT you will get back were you to “melt” your Orb.
Melting is a brand new concept, the ability to basically deconstruct your node in exchange for the native token. How much LVT you get back is dependent on the Tier of your Orb.
So a base tier Orb will melt down to 50% of its value in LVT. An Omega Orb will melt down to 70% of its total value.
This is an interesting concept. What it does is offer investors another angle of gamification to work with.
Say you go through the whole process of compounding Elements and combining them to form an Orb, but the Orb turns out to be sort of a dud. It’s all relative of course because even the most common Orbs will pay out .7% a day, which is what OG LVT nodes paid out at max bonus, but if you were going for 1% and landed a .8%, you might feel like you want to have another go.
Instead of having to completely reinvest new money into the protocol, you can take that Orb and melt it down for 70% of its value. This is a quick and easy way to jump right back into the gamification cycle.
Of course, you could just accumulate your Orb rewards or even sell your Orb on an NFT marketplace in order to recoup as well, but it’s nice that the option exists.
You can also think of the melting option as a powerful lump sum to be paid out down the road. If the value of the LVT token increases, and if you spend several months compounding your Orb after it has been created, the total sum of the payout you receive by melting your Orb could be substantial.
Also if you go through the process of creating many Orbs, and you have some that are rarer and better than others, you might consider melting down the common ones and reinvesting that money back into the ecosystem or even as a means of taking profits.
Understanding RNG and Tiers
Although the new mechanics that come with LVT 2.0 are rather simplistic, talk of RNG and all of the different tiers may leave some people a bit turned around.
Here is a quick and easy summary of the different tiers, reward rates, and rarities of all of the different LVT nodes, as well as other important bits of information:
- No Rarities
- No Tiers
- Flat .5% a day reward rate
- Claim rewards or compound once per day
- Minimum 100 LVT to buy
- Compound to increase node size
- Tradable NFT
- Can be merged together
- Cannot be used to create an Element or Orb
- Legacy nodes. These are the new version of LVT 1.0 nodes.
Elements (Meteorite, Titanium, Dark Matter and Cobalt)
- 6 Rarities (Common, Uncommon, Rare, Epic, Legendary, and Mythic)
- 3 Tiers (Must Compound 15 times to reach Tier 3, does not affect reward rate)
- Flat .6% a day reward rate
- Claim rewards or compound once per day
- Minimum 25,000 LVT to buy
- Compound to increase node size
- Tradable NFT
- Can be merged together (need one of each Element)
- Claiming does not reset your Tier
- Used to create Orbs
- 5 Rarities (Common, Uncommon, Rare, Epic, and Legendary. Rarity is determined by traits of Elements used to create the Orb, including node size and rarity.)
- 5 Tiers (Beta, Delta, Alpha, Sigma, and Omega. Each Tier takes 5 compounds to reach.)
- Reward rates: Common (0.7% – 0.874%), Uncommon (0.875% – 1.04%), Rare (1.05% – 1.224%), Epic (1.225% – 1.39%), and Legendary (1.4% – 1.45%)
- Claim rewards or compound once per day
- Minimum 100K LVT investment (can’t buy Orbs, they can only be created by merging 4 Elements)
- Compound to increase node size, but does not affect rewards, which are determined at the time of Orb creation
- Tradable NFT
- Cannot be merged together
- Claiming does not reset your Tier
- Can be melted down for 50% – 70% of your Orb’s total LVT value, in exchange for LVT tokens
Black Holes are easy to understand, they are basically the same as the old LVT nodes, minus bonus Tiers and with new NFT functionality.
Elements come in 4 different types. You can choose which ones you want, and their rarity is decided by RNG at the time of minting. You have to compound an Element 15 times for it to be eligible to be merged.
Orbs are created from one of each of the 4 elements and also have a rarity determined by RNG, which is based on traits of the respective Elements. The size and rarity of your Elements are the main factors in determining the rarity of your Orb, and therefore the reward rate.
As you can see, once you break it down, the system is simplistic.
Let’s take a quick look at RNG, however.
True RNG is actually somewhat rare as far as blockchain functionality is concerned. For instance, many NFT collections and their traits would appear “random,” but the actual RNG component is not handled by the blockchain, but is used before the NFT mint occurs.
Why is RNG important? This is an element used all over, especially in the gaming industry. Being able to have a truly random system that determines traits on the fly means you can create a fair system of true rarity. When this rarity system translates into passive income, you have the perfect recipe for an addictive and rewarding protocol.
Much like a trading card game, or Pokemon, the prospect of possibly finding a “rare” that has more value and its counterparts is hard to resist, especially for collectors.
The difference between a node paying out .7% a day and 1.45% a day is quite substantial. Not unlike a Pokemon with perfect breeding traits, collectors and investors are going to have to “pull” dozens of Elements in the hopes of landing a Mythic. They will then have to compound it, further adding to the protocol.
Even if you land multiple legendary and mythic elements, there’s not a guarantee you will come out with a perfect 1.45% Orb. Yours might only be 1.3%.
Great, but not perfect.
It’s that addictive RNG factor that will have some people chasing for more, and that’s the true value behind an RNG system. When rarity traits can be determined on the fly, and when that rarity directly translates to value for investors, you create a kind of flywheel that almost ensures protocol longevity.
Think of how much these NFTs will be trading for on the open market and how much hype could be generated around them?
Best Strategies For Maxing Your APY
So now that you understand LVT 2.0 on a deeper level and everything that it has to offer, let’s get down to what matters at the end of the day: how can you as an investor profit?
There are so many node protocols out there right now. Failed projects, rugs, and even a wide variety of great projects, all vying for our attention.
If you are invested in the Louverture ecosystem, you’re going to want to know how to maximize your gains and use the new system to its fullest.
For those who want a simpler approach and don’t have the time or patience to try to create high-paying Orbs, there’s nothing wrong with sitting on your Black Holes and potentially buying an Element or two and compounding them. The stable .5% and .6% rate on these nodes coupled with potential price action could be a smart conservative strategy.
Node NFT flipping is going to be big. I recommend monitoring the market for low-hanging fruit, people listing their NFTs for below market price because they need quick money.
Strategy 1 (Using Rewards to Buy NFTs):
If you already have large Black Hole nodes, you may want to take your rewards, convert them to AVAX, and snipe deals on NFT Trade.
This could potentially enable you to get large and lucrative NFT nodes at a reduced cost (compared to what it would take to compound these nodes on your own when you consider time and gas fees).
If you see a large daily payout because you’re sitting on mega nodes, you could even use this strategy to buy up rarer Elements or Orbs.
Strategy 2 (Bear Market Safety Blanket):
If you have a low risk tolerance or just want some insurance against the market at present, converting your rewards to stables and sticking them in Platypus Finance is not a bad idea. This way you can hedge against the instability of AVAX and LVT while still taking advantage of a solid APY.
If the market turns around, you can then deploy these stable coins to reinvest in more LVT and nodes.
Strategy 3 (Degen Collector):
It’s hard to say how the market will price rare Elements and Orbs, but if this new system takes off, we can be relatively certain that they will fetch a very high price on the market.
UNIV planets, for instance, don’t have any gamification / rarity elements and yet still trade for several AVAX a piece on NFT Trade simply due to their size / reward payout.
You can imagine once rarity traits come into play, some of these NFTs will be going for thousands of dollars a piece.
This means that you could potentially make a lot of money simply by minting a ton of Elements. If you have the money to spare, going in with the mentality of collecting and selling rare NFTs could be a play.
Patience is also rewarded here. There are plenty of people who are not going to want to deal with the 15 days of compounding for every Element just to have a chance at creating an Orb every time they want one. This means there will always be a healthy crop of buyers looking for rare and fully compounded Elements on the open market. If you forge a dozen Elements and take the time to compound them all, you have several options:
- Sell the rarer ones as NFTs
- Create Orbs out of the leftovers and enjoy your .7%+ daily rewards (if the Orbs turn out to be commons)
- Sit on the higher rarity Elements and wait to pull a full set of rares in order to create your own rare Orb
- Sit on the higher rarity Elements and compound them for a long time, then list these on the open market where you can expect a high return
- Continuously create Orbs as quickly as possible and list them, because there is sure to be a market of buyers who want the .7% reward rate and who want to bypass the Element system altogether.
Strategy 4 (Element Maxi):
Sure, the Orb rewards might be lucrative, but for some, the investment might be too steep upfront. Others might not have the time to dive into the gamification aspects and would rather not bargain hunt on NFT marketplaces for good Orbs.
There is a viable alternative however.
Elements are actually incredibly viable by themselves. With a .6% a day reward rate and the ability to compound, they are perfect for investors that want a solid form of passive income without any complexity.
Remember, once you create an Orb, its reward rate is decided at the time of creation. So no matter how much you compound after the fact, your rewards will not increase, only its potential melt value.
This means that if you are a compoundooor, Elements are actually a smart option.
Just like original LVT nodes, you can compound your Element nodes, which will increase the base amount of LVT in your node and therefore increase your daily rewards. Eventually, you will be able to create very large nodes even without investing more money into the protocol.
If you are starting out with a smaller or set budget, you may not be able to create a very large Orb, which means you can’t rely on compounding in order to improve its reward rate.
Therefore creating a beefy Element node could actually yield a higher reward rate for you compared to an Orb created with the same amount of LVT, several months down the road.
Of course, you may want to make sure the Element you are compounding into has a decent rarity, just in case you want to sell it or merge it in the future.
Louverture Migration FAQ
I have compiled a list of some of the most frequently asked questions regarding LVT 2.0, the state of the protocol, the migration, and the whitepaper. If there is an important issue that is not answered here, please feel free to reach out to me on Discord or Twitter and I would be happy to add it here.
– Wen Migration?
Currently, there is not a date set. It could be any day now. The Louverture community Discord and official Twitter are the best places to check.
– What’s so great about RNG anyway?
The RNG factor is what sets LVT 2.0 apart from virtually every other node protocol out there. Despite the apparent randomness involved with stuff like NFT mints, very few events on the blockchain are actually random.
Most NFTs are the perfect example of this. From the minter’s perspective, you are receiving a “random” combination of traits, when you mint. Some of these traits could be rare, and most are common. Everyone hopes to pull rare traits because these NFTs will be worth more. Hopefully luck is on your side!
However, this isn’t actually a random process. The NFTs are built beforehand, outside of the blockchain, and while the traits themselves may very well be randomized, the process of receiving that select NFT is not. If you mint NFT #1677 from a particular set, you are not making a call to some randomizer or RNG system. The NFT is already set, if you mint #1677 that one’s traits are set in stone already.
However, true RNG is something altogether different. It’s what makes games like Pokemon so addictive, the prospect of finding a shiny with rare traits for instance. The 1 in a million chance for something that is truly special because it is not predetermined.
LVT 2.0 node NFTs will work much the same way.
Instead of there being a set arbitrary amount of “legendary” Orbs (like Hive is doing with their Queens, for example), the number of possible Legendaries is random. Anyone could fuse one. Or no one.
A very real scenario could arise in the first month of LVT 2.0 where only 1 person in the world has a max reward legendary Orb. What do you think the demand for something like that will be?
When real RNG is at play, it creates a dynamic where rarity meets scarcity. The fact that you have to invest a minimum of 100K LVT to get 4 elements to fuse into an Orb sets the floor for a rare one at a very high price. We could be looking at something that, in a bull market, could be worth tens of thousands of dollars minimum.
Speculation aside, once you look at the benefits of a real RNG system, you realize how revolutionary it is for the node space and DeFi as a whole.
– Do pending rewards and LVT tokens in our wallets transfer over during the migration?
Yes. Everything is transferred over.
– What will be the new price of LVT once the migration occurs?
The market decides the price. We can likely expect a similar price to what LVT was trading at before the liquidity was migrated, roughly a 2 million market cap.
– Where can you buy Louverture NFTs?
No NFT marketplace has been named yet but NFT Trade is a popular option on Avalanche and a likely candidate.
– Are these tokenomics sustainable?
Based on the direction similar protocols are going, it would appear .5% – .7% reward rate per day is the sweet spot. As long as the majority of nodes are in this range, sustainability is ensured. Since the Orbs with higher payouts will be so rare, they do not adversely affect the sustainability of the protocol (Thor and Hive are 2 protocols that are using a similar model with their reward rates, where the rarest nodes payout over 1%).
– Will the price of LVT increase? There was a lot of downward price action for months. What is different now?
Part of the downward price action of LVT 1.0 was due to the market conditions, there can be no denying that. FUD didn’t help matters either. The 3rd issue was the automatic contract sells, where the protocol would sell off LVT every time someone would compound. All of these 3 things combined to bleed LVT throughout most of January and February.
The new NFT and gamficiation mechanics would seem to indicate that there will be massive buying pressure on LVT 2.0.
Here are just some of the reasons why:
- No more contract sells
- Rarity system ensures that investors will have to keep buying Elements if they want a chance at good ones worth turning into Orbs
- All Elements must be compounded 15 times each in order to be eligible to be merged into an Orb, which feeds the treasury.
- A large portion of Orbs that are melted down (30% – 50%) get converted to LVT and go right back to the treasury.
- Orbs have a fixed reward rate and can’t be endlessly compounded, which is a different approach than virtually all other node protocols. This way large Orbs can’t be compounded indefinitely in order to get massive rewards that could potentially be sold off to harm the token price.
With renewed hype and trust, along with these new mechanics, we can be fairly sure that LVT 2.0 will see stable and even positive price action. Of course, market conditions will obviously play a large role here. Macro trends dictate where these smaller DeFi protocols can go in the short term.
– Is Louverture still a VC platform?
Yes. The first VC investment has not yet been made, however. This is a part of the roadmap listed on the new Whitepaper.
– Is Louverture making treasury investments?
Yes. If you have been following what’s been happening over the past month, the treasury has been put to work, especially in the GameFi sector. As Louverture plans on being a large player in the GameFi space, they have invested in Crabada and have even turned a profit in this bleeding market.
– Can you merge Orbs?
No, it doesn’t appear that that is an option.
– Can Black Holes be turned into Elements or Orbs?
No. This would reduce buying pressure on the new token and would inflate the token wildly as thousands of OG nodes get turned into Orbs without new money entering the ecosystem. Black Holes can only be merged into larger Black Holes, but not turned into anything else.
– Can we sell our old nodes and exit LVT?
Yes. Your old nodes are now Black Holes and can be listed on NFT marketplaces and sold for AVAX. If you want to leave the ecosystem completely, you have the option.
– – –
In the coming days, as more is revealed about LVT 2.0 and its mechanics, this article will be updated. There will also be a section on how to use the new Louverture dapp, and where buy and list your Louverture NFTs.
Looking for more information on LVT 2.0: The Rise? Check out the official Whitepaper.
As always, none of this is financial advice, and nodes are at the cutting edge of decentralized finance. Invest at your own risk.
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.