The time has come for us to migrate and begin a new phase at Lava. Although the node model was a good method of raising capital, it stifled the growth of our platform due to its emissions alongside some tough markets. Price stabilizer and compounding incentives worked as intended but their purpose was for managing emissions rather than building for the future of Lava. The new model clears that road and allows us to focus more on expanding and building out our sister projects.
Additionally, the new model gives investors full ownership of their portion of revenue share via the Lava Venture Pass (LVP) NFT. This allows owners of the LVP to decide whether they want to hold the LVP and be eligible for rewards or sell it on a secondary market. We are also exploring ways to add further utility to the LVPs through partnerships such as NFT staking.
To address seed-level investments within the new model, we created a system that informs holders and potential buyers of LVP NFTs which seed-level investments the NFT has access to as well as introduce a rarity level.
The access level system
NFTs will be assigned an access level based on the seed investments they are included in. This means that if a node was minted on or before 5/23/2022, when it is converted to an NFT, it will have an access level of 6 (maximum level), which is the quantity of seed-level investments with which the node has been involved. This is our way of making sure that those who have been with us the longest are compensated properly.
Furthermore, their rarity will be visually displayed through the NFT art design, which we are really excited to share with our community.
Before we get there though, it is essential to talk about the migration process, how all Lava assets will be handled as well as what your options are.
Here is a summary of what we have shared with you so far regarding how we will manage our tokens and products.
- All Novaruptas will be converted to LVP NFTs at a 1:1 rate. Essentially, the considered minting price of the LVP NFT is the price of a Novarupta — $150
- Lower tier nodes will be fused to LVP NFTs, given that their dollar value reaches the equivalent value of a nova.
- For any remaining lower tier nodes that don’t reach the fusion threshold, their value is added to the TrueROI balance.
- Any LAVA (including unclaimed LAVA rewards) and pLAVA tokens will be added to your TrueROI balance at a $.30/token rate.
- NFT Booster holders will keep it with them after migration and also be compensated based on the level of their Booster:
- Level 1: Will receive 2 NFTs per Booster
Level 2: Will receive 6 NFTs per Booster
Level 3: Will receive 14 NFTs per Booster
Let’s take a look at an example to see how all of these variables work together:
John has 7 Fujis, 2 Krakatoas and 2 Novas in his wallet. He also has 300 unclaimed LAVA, 100 LAVA as well as 100 pLAVA — with his TrueROI being $500. He is also a holder of a Level 1 Booster NFT.
John will receive a total of 6 LVP NFTs and his TrueROI will become $680.
2 Novas → 2 NFTs
5 Fuji (5 * $30 = 150$) → 1 NFT
2 Krakatoas + 1 Fuji (2 * $60 + 30 = 150$) → 1 NFT
Level 1 Booster NFT → 2 NFTs
1 Fuji ($30) doesn’t reach the fusion threshold + LAVA and pLAVA tokens (500*$0.3) are added to TrueROI balance → $680
Available options during migration
With Novas being converted to NFTs and lower tier nodes going through fusion, as described above, the options revolve around how users want to utilize their TrueROI balance.
To accommodate all existing holders of Lava assets, we have decided to offer three potential options that will cater to users that want to make use of their TrueROI balance to its full potential within the protocol, those that want to exit their remaining balance, as well as those who want to calibrate their position within the Lava Financial ecosystem.
1) TrueROI Incentive Bonus
This option is ideal for those who want to maximize their position, where their TrueROI balance is converted to additional LVP NFTs at a rate of $150/NFT (the current price of 1 Novarupta node).
If Alice (John had his time to shine) had $3000 in her TrueROI balance and opted for the 100% NFT option, then she would end up with ($3000/150) 20 NFTs
This option was created with compounders in mind, as users were compounding nodes at 5% of the cost for months, and also any pLAVA accrued is included in the final TrueROI balance.
Additionally, this option caters to those that have purchased nodes at an unfortunate price and been subject to the rapid price decrease, due in part to the rough bear market.
2) TrueROI USDC Buyout
As the LAVA token was retired on 10/6/22 and liquidity was withdrawn, we decided to offer the remaining LP to those that wish to exit their TrueROI position. Based on current TrueROI numbers and the amount remaining in the LP, the protocol will buyout users’ TrueROI balance at 21% of the value.
If Alice had $3000 in her TrueROI balance and opted for the 100% USDC option, then she would end up with ($3000 * 0.21) 630 USDC
3) Partial Buyout
This option is a combination of the previous choices and allows users to specify the amount of NFTs they want to convert from their TrueROI balance, whilst also being paid the remainder of their balance at the 21% rate.
We have designed a migration dashboard which will be available when the process begins.
Below you can see an example of the dashboard with values added to demonstrate the migration process. Numbers may not be accurate in this instance.
You will be able to see a complete breakdown of your Lava assets as well as your available options.
Once you have decided which is your preferred option, you simply hit “migrate” and your NFTs are minted and the USDC is distributed.
It is important to remember that this can only be done once, so be mindful when finalizing your option.
The migration process will last for 90 days, starting on Tuesday, 11/1/22 and finishing on Wednesday, 2/1/23. The migration bonus incentive will only be available for 30 days from launch of migration up to Thursday, 12/1/2022. We feel that this is more than enough time for anyone to weigh their options and to complete the process.
Things to consider
In order to make the best decision, it is important to take into account all the relevant information.
The quantity of the LVP NFTs minted is determined by the upcoming investor decision during migration. This means that the less NFTs minted, the higher the allocation between LVP holders.
Based on the access level system, the higher the level of the NFT the higher its potential value is expected to be.
Additionally, any LVP minted from the TrueROI balance will be a Level 0 NFT. Since the protocol is buying out TrueROI balances at 21%, effectively Lava is buying out potential Level 0 NFTs at $30 each. It is reasonable to speculate that the price of the LVP will be higher than this in the secondary market.
Another aspect to consider is the ability of Booster NFTs to level up your LVPs. This is one of the latest perks of the Boosters and gives newly minted NFTs access to seed-level investments previously available only to higher level LVPs.
The Booster NFT benefits up to 40 LVP NFTs and increases your LVPs up to 1/3/max levels for Booster tiers 1/2/3 respectively. If you are late to the Lava party or you decide to convert your TrueROI balance to 100% NFTs, with the Booster NFT you have the ability to catch up and get access to seed-level investments previously made by the protocol.
Finally, as there is a limited amount of LVPs that are minted, the availability of the NFTs in the secondary marketplace post-migration is a true unknown. We expect that as we continue to grow the Lava ecosystem — with the current seed-level investments vesting periods coming to an end and the potential revenue streams from our sister projects — the LVPs will be harder to find as well as more expensive.
The prospect of reaching the revenue sharing phase is a milestone we’ve all been waiting for and we are one click away from reaching it. As always, we are active on Discord for comments and questions. Let’s make the next step count. 🌋