Long Bitcoin Token (LBTC) is a leverage token with long exposure to BTC, available on the Binance Smart Chain. LBTC will generally overperform when BTC is strong and underperform when BTC is weak. You will earn more LBTC as the price of Bitcoin increases, and lose LBTC if the price of Bitcoin decreases. Positions can't be liquidated.
|Chain:||Binance Smart Chain|
|Long term holding fee:||0%|
New LBTC can be minted by sending GRT to the LBTC contract address. LBTC can be redeemed back if sent to the GRT contract address. The exchange rate is always 1:1. Some wallets will warn about sending funds to a contract, these warnings can be ignored here. There is a daily limit of how much can be redeemed and minted, if reached, your transaction will automatically revert. No more than 5% of current total supply can be minted in 24 hours. See more details on this here .
There are 2 type of fees, Transfer Fee: Buy/sell tax of 0.1% for wallets with more than 10000 GRT, for all other situations the transfer fee is 0.2%. Minting fee: A minting fee of 0.3% is charged when minting and redeeming LBTC. Both might change in the future.
The internal price of the LBTC token is what determines the amount of coins for LBTC holders. This price can be seen in real time in Figure 1 above. If this price moves up, holders will get more LBTC, if this price goes down, holders will get less LBTC. It's calculated the following way (simplified).
1) The LBTC price is first calculated: P = Pbtc3/ ma 2 , where ma is the 60 moving average of the btc price.
2) When the BTC price is above the 60 day moving average, "interest" will accumulate. If the price goes below the moving average, "fees" will instead be accumulated.
IF (Pbtc > ma) : interesttot += t * (Pbtc - ma), IF (Pbtc < ma) : feetot += t * (ma - Pbtc), where t is time since last contract update.
3) P will then be multiplied with all accumulated fees and interest. R is the final result.
IF (feetot > interesttot) :
R = P * 100 / (100 + (feetot - interesttot))
R = P * (100 + (interesttot - feetot)) / 100
Figure 2. Historic price performance of LBTC and BTC, assuming the price of GRT is stable (simulated with slighly different settings).
There are mechanisms in place to mitigate damage from potential inflation bugs or oracle problems.
* Profit limit. This should not be triggered under normal circumstances. If the ratio between total loss and total profit in LBTC reaches a set threshold(> 10x), the token would stop following the price of the oracle, it would just become pegged to GRT. In such a scenario it would still be tradeable/redeemable/mintable.