Asset Payouts

In the Ludum Vitae (LV) system, tokens represent a stake in the underlying assets of a sphere, which could be a pool of investments, currency, or any other tangible or intangible asset. When a participant, or “Member”, decides to withdraw their tokens, they are essentially converting their digital stake back into the underlying asset, which might be cash or another form of value.

Details

Here’s the detailed process of how withdrawals can lead to disinflation within the LV system.

Reserved Tokens

As a Member, you will have a balance with a Reserved Token amount, this balance is the estimated total of tokens obligated to the next cycle.

Reserved Tokens include but not limited to

• Previous withdrawal request.
• Pending Tokens applied to Stake
• Pending Gems and Bonds Fees

Withdrawal Request

An Member initiates a withdrawal by indicating the number of tokens they wish to convert back into the underlying asset. This action signals to the LV sphere that a portion of the sphere’s asset is to be liquidated on the next cycle.

Projected Diminution

If diminution is projected to withdraw from your wallet, that amount will be held in reserve by the sphere until the end of the cycle.

Staked

Tokens Staked to Values must be withdrawn from stake first, before becoming available to withdraw.

Token-Asset Conversion

Upon the withdrawal request, the LV system calculates the current value of the tokens based on the most recent ratio of the total token count to the total underlying asset value. The Member’s tokens are then exchanged at this rate for the equivalent value of the underlying asset.

Decrease in Total Token Count

As the underlying asset is withdrawn from the sphere, the total token count is reduced accordingly. Since tokens are a representation of the value of the sphere, the removal of the underlying asset diminishes the total value, and the LV system retires the corresponding number of tokens to reflect this.

Disinflationary Effect

The act of decreasing the total token count through withdrawals is disinflationary. Disinflation is a reduction in the rate of inflation, which in this context means that with fewer tokens in circulation for the same amount of underlying asset, the value of each remaining token is likely to increase or at least remain stable, assuming demand stays constant or increases.

Re-balancing

After the withdrawal, the LV system immediately calculates the new token supply and the underlying updating the token-to-asset ratio. As soon as the next cycle happens, updates to the distribution of tokens among remaining active participants happens.

Summary

By ensuring that the token count reflects the actual value of underlying assets, the LV system maintains a stable and fair economy for all participants. The disinflationary effect of withdrawals serves to protect the value of tokens and the integrity of the sphere, making it a self-regulating system that can effectively manage both expansion and contraction of its asset base.