OCLT tokenomics

By now, those who follow OffChain Luxembourg asbl have learned that we are a "tokenised decentralized human organisation". In this post, we'll focus on our token, OffChain Luxembourg Token (OCLT), on its tokenomics and on how it benefits the whole Hive ecosystem, by using a concrete example.

Economic activity

For a currency (such as OCLT) to have sustainable value, it needs to be linked to genuine economic activity. That involves people coming together, interacting and creating social and economic value.

This is precisely what we are doing! The OffChain Luxembourg community is getting together generally twice a week:

1. Members convene on Wednesdays for a workshop (with emphasis on work)
2. Both members and the general crypto-curious population is invited on Thursdays evening to a laid-back, relaxing (yet educative) meetup called Letz'Offchain. Let's mention here that these events are organised in restaurants that accept HBD as payment

In addition, we also organise thematic events, 8 to 10 times a year. Our latest such event was inspired by @masterswatch presentation of "Clean Planet" at "Hive Summit Aachen" (check @hivesummitaachen to watch all the presentations if you haven't done so yet) in August this year.

Thanks to @soniabr 's relentless efforts to have it set up, it brought together about 10 people to help clean one of Luxembourg's city parks.

Besides providing some welcome exercise for us, sedentary urbanites, our rain-drenched, antics-filled Saturday morning stomping through the park helped a bit in the relentless fight against waste and pollution. For more pictures, there's a post about that action in the associated @ocln-content account. Where you'll see that, after a moist morning, soaked and shivering we got together at Indie's for a nice lunch.

Our "current account", @ocl-paymaster paid for that lunch with HBD, and those HBD remained in the Hive ecosystem in Independent's cafe wallet (mostly thanks to the juicy 15% APR that HBD provides, and without which they might have taken the road of Binance to be converted back to fiat)

The participants to the lunch contributed freely toward the cost of the organization - some paid 0, some paid more than the cost, according to their wishes.

Demand for Hive

Because OffChain Luxembourg doesn't have a bank account and Hive is our bank, the proceeds were transferred from Stripe to Binance and were used to buy Hive. This brings fresh fiat into the Hive ecosystem and creates demand for Hive.

As our costs are often in fiat, we swapped the Hive to HBD.

OCLT tokenomics

As you know, we are selling OCLT in order to fund our initiatives:

• Innopay (https://innopay.lu) - detailed presentation here, and
• Plaza (https://plaza.lu) - detailed presentation here

But a very reasonable question that people invited to buy OCLT ask is: "How are we going to earn a return on the money spent buying OCLT?"

Especially as both Innopay and Plaza are leveraging Hive's incredible competitive advantage: zero fees.

Well, zero fees are nice for the users, but they are a bummer for investors. Indeed, crypto investors are used to think that the main source of demand for a blockchain's native coin are the transaction fees charged by the network.

Hive uses a much more sophisticated economic model. Because it doesn't charge fees, it has the potential to attract users from all walks of life, not only people interested in financial activities. Indeed, who would come to blog on a blockchain that charges the blogger a fee, when there are so many free alternatives in the Web2.0 world?

The closest analogy of Hive's economic model is that of a "virtual country" (or a "network state"), as I was explaining many years ago when we were Steem.

OffChain Luxembourg aims to use a similar economic model for its OCLT token. While harder to pull off, it is by far the most innovative and sustainable in the long term. OCLT is designed with the vision of becoming a complementary currency for a community straddling the "Greater Region" (Luxembourg, Lorraine in France, Rheinland-Pfalz and Saarland in Germany, Liège and Belgian Luxembourg in Belgium) and as such, exchanging OCLT for fiat will be done at rates influenced by the "Foreign Direct Investment" (FDI) and the "Balance of Payments" of our community.

As we've illustrated above, the "Clean Planet" event brought some fiat to our organisation (that turned to 1915 HIVE). We were not "break even" this time, as we spent more on the event organisation than what we collected, but that is not the main point here (and the event was a net positive for Hive as long as the fiat brought in remains in the Hive ecosystem, regardless of the wallet that holds it).

We are of course strongly attached to freedom, including "freedom of capital" (also one of the 4 fundamental freedoms of the EU). And in order to insure that, we need to make sure that OCLT holders can get in an out of OCLT. We achieve this through the SWAP.HIVE - OCLT liquidity pool (LP).

And here's our main tokenomics mechanism: each time OffChain Luxembourg asbl earns fiat, a certain percentage of the fiat earned is added to the LP, thus sustaining the demand for OCLT.

Currently, that percentage has been fixed by the Board at 10% because we need to invest in order to grow. When our growth will slow down, potentially up to 90% of the fiat earned will be turned to SWAP.HIVE and sent either to the LP or added as "buy" orders in the order book of Hive Engine.

OCLT sources of demand

For those who want to support our work, we encourage you to buy OCLT either by swapping or from the order book. As a reminder, it is a legally-compliant token (the first in Luxembourg to comply with the EU's MiCA regulation).

As our initiatives (of which Innopay is currently the most promising) move into generating revenues, a percentage of these revenues are bound to be allocated to buying OCLT from the market, thus contributing to an increase in the value of the token

And for those who want to get even a symbolic stake in the future success of OffChain Luxembourg and its OCLToken, some good news: it is currently possible to buy OCLT directly from Hive Keychain! Kudos to @stoodkev and @cedricguillas for implementing these swaps!

Conclusion

This post explained the following:

1. How OffChain Luxembourg asbl brings people together and generates new economic activity, supported by Hive, Hive Engine and their currencies, HIVE, HBD and OCLT
2. How this economic activity is beneficial for the Hive ecosystem, bringing fiat into HIVE and HBD
3. How this activity generates demand for our MiCA-compliant token, OCLT, thus making it "investable"