While the memecoin<\/a> narrative may be fading and the future of social tokens<\/a> remains uncertain, new experimental token designs continue to emerge.<\/p>\n The LINQ<\/a> token surged to a market capitalization of $38M on Aug. 28, just 17 days after going live.<\/p>\n <\/p>\n <\/a><\/p>\n LINQ collects a 6% tax on all transfers of the token. Half of the tax is used to add liquidity to a Uniswap pool<\/a> for LINQ-ETH. LINQ holders are periodically able to claim those liquidity provider (LP) tokens in proportion to their holdings.<\/p>\n There are a handful of reasons to distribute LP tokens to LINQ holders, according to the project<\/a>.<\/p>\n Founders of scam projects often remove liquidity and sell large amounts of tokens \u2013 the quintessential rug-pull \u2013 making it impossible for holders to exit the token. A wider distribution means that it\u2019s harder for any one party to pull liquidity for LINQ.<\/p>\n Another reason to distribute LP tokens is that LINQ holders are less incentivized to cash out since they\u2019re holding a revenue-generating asset, claims the project.<\/p>\n Creating incentive structures around a token\u2019s liquidity isn\u2019t a new concept. DeFi projects have long incentivized users to provide liquidity in exchange for token rewards.<\/p>\n OlympusDAO may not<\/a> return to its former glory, but it did spur noteworthy conversion about ways for protocols to acquire their own liquidity<\/a> instead of relying on fickle LPs. Now there\u2019s LINQ, which instead of trying to acquire LP tokens for the project, is trying to distribute them through a tax system.<\/p>\n There are currently over 1,000 holders of LP tokens for LINQ-ETH, according to Etherscan<\/a>. That means that with over 3,600 addresses holding LINQ, over a quarter of the holders are also providing liquidity. That\u2019s a high percentage compared to most tokens which tend to only attract a small fraction of token holders to also provide liquidity. The LINQ team calls this system \u201cdecentralized liquidity.\u201d<\/p>\n The remaining 3% of the transfer tax goes to the wallet<\/a> that deployed the token. A module to distribute a portion to users who stake their LP tokens went live on Aug. 29.<\/p>\n![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2F1b19dab29ebdf28ecc4a99ec333f199dbbf0dc9a-1600x777.jpg&w=828&q=75\")
\u2018Decentralized Liquidity\u2019<\/h2>\n