What is a Reflection Token?
podle LCX Team · January 21, 2022
Tiamonds introduced their own reflection token, the TIA Token. TIA Tokens are the deflationary tokens and a product by LCX. …
Blockchain and cryptocurrency technology constantly evolve, resulting in numerous groundbreaking use-cases, streams, protocols, and cryptocurrencies. Crypto enthusiasts now have a new technical lingo term to add to their vocabulary. The reflection mechanism was recently introduced into the cryptocurrency space to revolutionize the concept of yield generation in DeFi. The concept of reflection emerged from a project called Hoge Finance and was popularized with the launch of Safemoon, the memecoin.
Inspired by these Pioneers, Tiamonds introduced their own reflection token, the TIA Token. TIA Tokens are the deflationary tokens of the Tokenized Diamonds project by LCX called Tiamonds.com. This article will explore the reflection mechanism and hold and earn model adopted by TIA Token.
Without further ado, let’s dive into the details of what a reflection token is?
What are reflection tokens?
A reflection token is a cryptocurrency whose holders are rewarded by levying fees on transactions and then redistributing a percentage of the fees charged to them.
A ‘reflective token’ distributes a percentage of every transaction back to its holders. Token holders are encouraged to hold onto their tokens and earn rewards from transactions on the market by using this mechanism.
The advent of DeFi introduces additional earning and passive income opportunities for investors through staking, liquidity mining, and yield farming. Reflection tokens propose a new and innovative way to earn a yield on cryptocurrencies.
The model prevents whales from easily manipulating and exploiting small-cap DeFi projects because of their usually astronomical token supply and reflection token mechanics.
As part of this strategy, early participants are discouraged from dumping their tokens early during the price discovery phase.
How do reflection tokens work?
Reflection tokens use a static reward system, which means that any transactions involving these tokens will incur fees. A percentage of the proceeds will go into a liquidity pool for every transaction. Another percentage will be allocated among token holders.
Due to this, the tokens have an intrinsic value and are designed to encourage a ‘hold and earn’ approach, thereby reducing selling pressure. A reflection mechanism is executed through smart contracts, automating token distribution across holders, liquidity pool, and a burn wallet, requiring token holders to keep hodling these tokens in their wallets to receive their rewards.
The reflection mechanism was primarily adopted by several cryptocurrencies, among which Safemoon was the most popular cryptocurrency. With over 585 trillion coins in circulation and a market cap upside of $2 billion, this crypto has amassed over 2.5 million holders since it launched in the first quarter of 2021. The reflection mechanism of Safemoon uses a smart contract that charges a fee of 10% for each transaction, which is split among holders, liquidity pool, and the token burn wallet.
Merits of the “Hold and Earn” mechanism
The Hold and Earn mechanism addresses selling pressure and excessive price movements and offers benefits to earn yield without staking. Other key issues addressed by the Hold and Earn mechanism include:
- DeFi yield generation: The Hold and Earn Mechanism awards bonuses, allowing holders to use their tokens to earn staking benefits without staking them and for other yield generation purposes.
- Fair distribution of earned tokens: The distribution process is automated, so it depends on how many tokens each user holds at any given time.
- No Staking: Each altcoin project aims to incorporate a unique approach to earning yield by investing in it. The Hold and Earn Model enables holders to earn yield for holding, eliminating the need to stake their crypto.
TIA Token Reflection
TIA Tokens are a community first, and fair launched DeFi Token connected to Tiamonds. TIA Tokens integrate the functions of a reflection token. Each on-chain transaction involves a fee of 10%, which is automatically distributed across holders’ wallets, a liquidity pool, and a burn wallet.
The fees are distributed as follows:
- Reflection: 5% fees are redistributed to all existing holders.
- Rebalancing: 2.5% fee is automatically sold by the smart contract into LCX token at Uniswap. LCX Tokens acquired will go into the company’s long-term reserve.
- Burn: 2.5% of the TIA Tokens are burned automatically.
Tiamonds offers one of the easiest ways to earn a yield in the crypto space; you have to be a holder in the Tiamonds ecosystem, and you can start increasing your earnings. Owners of Tiamonds will receive TIA Tokens. Users are required to hold 1 Tiamond NFT or more to earn rewards. Fees are awarded as soon as a transaction occurs. The rewards are automatically credited to the wallets of the holders.
How To Get TIA Tokens?
There are two ways to get TIA tokens:
- Own to Earn Model
- Buy TIA on DEX uniswap or LCX Exchange
Own to Earn Model
In order to earn TIA tokens through Tiamond’s Own to Earn Model, users are required to have a Tiamond NFT.
Owners of Tiamond NFT will receive TIA Tokens over a fixed period of time through the Own to Earn model. Each user who owns a Tiamond will get a fixed supply of TIA Tokens automatically. The TIA Tokens can be claimed by the owner at a dedicated decentralized app (Dapp) on the LCX platform.
Buy TIA Token
TIA Tokens will be available for purchase on two leading global exchanges, allowing millions of users to have access to TIA Tokens. TIA tokens can be purchased on Uniswap and LCX exchanges.
TIA Token on Uniswap
Uniswap is one of the biggest decentralized crypto exchanges in the world. UniSwap is a platform for automated liquidity provision on the Ethereum blockchain. It allows liquidity providers, traders and basically everyone to participate in an open financial marketplace.
100 Million TIA Token will be put into two Uniswap V3 trading pools, TIA /LCX and TIA / ETH. TIA / ETH will be set as a one-sided token pool with a starting price of $1 USD per TIA Token. TIA / LCX will be initiated with the support of Community Liquidity Providers as part of the Airdrop reward program. The liquidity pool will be vested and locked up over a period of two years.
TIA Token on LCX Exchange
The LCX Exchange is a regulated trading platform offering a range of digital currencies. LCX offers a secure and compliant platform for buying, selling, transferring, and storing digital currency.
TIA Token will be listed at LCX Exchange with three trading pairs: TIA / LCX, TIA / ETH, TIA / EUR.
Tiamonds: An Overview
Tiamonds is a tokenized diamond platform powered by blockchain technology.
LCX launched Tiamonds to demonstrate the opportunities of tokenized assets, educate consumers about tokenization by gamification, and create a community driven token economy.
With Tiamonds, LCX envisions a new era of digitalisation and tokenization of real world assets. Tokenization is a process of representing real-world assets on a blockchain with a token, such as real estate, equity in a company, or traditional financial instruments. LCX aims at unlocking the true potential of tokenization by tokenizing real world assets. The tokenization of real-world assets has the potential to bring trillions of dollars of value to the blockchain and drive mainstream adoption of blockchain technology.
For more information about Tiamonds, you can visit our website and follow us on Twitter.
