🪙NEO LP token (Liquidity Provider Token)

NEO LP token role in NEO DAO

NEO LP token has a unique role in our DAO. It represents a financial stake in the organization. The best way to replenish the treasury of NEO DAO is by minting LP tokens through public or private offerings.

To make it easier to understand, we will compare a NEO DAO LP token with those offered on DEX exchanges.

NEO LP tokens are used to track individual contributions to the NEO DAO treasury, as the number of NEO LP tokens held corresponds proportionally to the share of liquidity in the NEO DAO treasury.

Here is a simple formula for the NEO LP token price:

DAO AUM / Circulating Supply of LP Tokens = Value of 1 LP Token

In terms of technical characteristics, NEO LP tokens are not very different from other tokens on the same network. Like any other BEP-20 token, these NEO LP tokens can be transferred, exchanged, and paired with another token on a DEX.

However, unlike LPs issued on an exchange, owning LP tokens in NEO DAO does NOT give liquidity providers full control over their liquidity, as the funds in the LPs are managed by those who own the governance tokens (NEO GTs). Nevertheless, you can burn all or part of your LP tokens if the NEO DAO hasn't disabled the burn LP feature.

The relationship between NEO LP tokens and the proportional share of a NEO DAO AUM (assets under management) is most commonly used in at least two cases:

To determine the liquidity provider’s share of NEO DAO; To determine how much liquidity is returned to liquidity providers from the NEO DAO AUM after LPs decide to burn their LP tokens. To determine how much the liquidity provider should receive at the time of dividend distribution.

NEO DAO can make decisions on the further release of LP token to the exchange, can organize the stacking of LP token of NEO DAO. It is important for NEO DAO participants to understand that the LP token is fully secured by the NEO DAO treasury, until the token is traded on the exchange.

Additionally, it is important to note that the value of the LP Token is also strongly correlated with the number of Super App NEO X users, similar to the NRT utility token.

LP token use case We reveal in detail how to use the NEO LP token in our use cases. In general, LP tokens are needed to effectively raise funds for the DAO from DAO members or from external investors. Since NEO LP tokens are heavily formula-linked, we will be very careful NOT to increase the proportion of investors who buy LPs by directly transferring funds to NEO DAO account without buying LPs.

We will sell LP tokens through private sale, public sale, and through launchpad.

At the time when NEO LP tokens are being sold at a private, public sale, or through the NEO DAO Launchpad, it is forbidden to generate profit or contribute additional money through direct transfer to NEO DAO address. Because otherwise, the shares will be diluted and some investors can get more money by burning LP tokens than was invested. Only after the fundraising is over and all private, public offers, and launchpad are closed, NEO DAO can begin the process of generating profits.

It is forbidden to generate profit or contribute additional money through direct transfer to NEO DAO address. Because otherwise the shares will be diluted and investors can get more money by burning LP tokens than was invested.

The provided figures and information are approximate and for informational purposes only. They do not constitute a guarantee of income. Please note that all investments carry a risk and past performance is not indicative of future results. Investing in NEO DAO or any other investment opportunities carries a risk and potential investors should conduct their own research and seek advice from a financial advisor before making any investment decisions.