You are viewing a single comment's thread:
RE: Introducing ACE | Overcollateralized Stablecoin With +20% APR Yield Boosts and Lending
Could you have put in a peg mechanism for SURGE and used that instead of launching ACE? It felt like you already had an asset priced overcollateralized at $1 you could have chosen to use and issue new tokens but chose again to launch another one instead of trying to make an effort to get SURGE to function like a representation of $1 of value.
The short summary of the difference between ACE and SURGE is that you will try to keep ACE at $1 but won't try for SURGE?
I would suggest if you are making profit from arbitrage, trading and so forth to use a portion of it to buy back some of the assets SURGE/RWAs to reduce the future liabilities of leostrategy and get prices closer to where the target prices should be. so that would mean that current holders could be more confident in yield continuing for longer term because the overall liability of yield will decrease if you take some of the assets off the market. We will likely never be able to sell for close to $1 so the continuation of the yield is how we can expect to get our capital back. anything you can do to support the continuation of yield will help our confidence.
Or it could be nice to allow even in a limited fashion 1:1 conversion from Ace to Surge. My 2 cents, I am a bit disappointed that SURGE is falling by the wayside and you are launching another version of a $1 token that most likely will price better than SURGE.
It's a bit like launching "TTSLA2" and saying it will be a better version of a TTSLA instead of trying to improve TTSLA. it's a bit odd.
I get your frustration but you need to not think of SURGE as a stablecoin. This was mentioned in detail both in the early posts of SURGE and reiterated above here.
SURGE is like a fixed income bond. It operates completely different than a stable-pegged asset. You can’t redeem SURGE at $1 nor keep it at $1 because then you would be changing the principle mechanic of the token (the convertibility to LSTR).
The convertibility to LSTR gives SURGE uncapped upside. As LSTR rises in value (tied to the simultaneous increasing of LEO Per Share + LEO price rising), SURGE becomes infinitely more valuable. There is no upside cap on it.
Eventually, people will be converting their SURGE for $2, $6, even $10+ per SURGE. This is not how a long-term stable token can function.
Long story short, no we couldn’t do that.
Better story: we already solved this with the sRWAs and the RCBF. Not sure if you’ve been following the RCBF, but it has already created tighter correlations for TTSLA, TGLD, TNVDA. We are considering if this can be added for SURGE without taking away from the conversion capacity.
SURGE should have been launched with long-term staking requirements. Much like a 30yr treasury note — you looking at the day-to-day fluctuations isn’t the point of the token. The token pays you yield every week simply for HODLing. That’s how the bond aspect works.
SURGE has a $1 liquidation preference. This does not mean it is a stablecoin worth $1 in the market.
We could have chosen $0.50 or $10 as this liquidation preference. Choosing $1 was somewhat of a mistake on our part as it caused people to think of SURGE as a stablecoin and not a bond.
Irregardless, one day soon SURGE will trade well over its liquidation preference and people will finally realize the difference between a bond and a stablecoin.
ACE has extremely unique properties and I suggest looking at https://leostrategy.io/ace to learn more (mint/redeem functionality for lending, etc.). Surge has none of such properties and comparing the two is apples & oranges (or like comparing 30yr treasuries to USD)
This is very well explained.
I think the part that has confused most people is the "floor price" part when it comes to SURGE.