LeoStrategy's Flywheel of Volatility Harvesting
In this clip from the LeoStrategy deep dive I did, I talk about the flywheel that LeoStrategy is creating when it comes to Volatility Harvesting (aka market making). LeoStrategy is able to market make all the LEO pairs and it is also able to market make LSTR, SURGE and potentially other derivatives they create in the future.
As they make profits from market making, they use 100% of the profits to expand their balance sheet (buy more LEO and perma stake it). As they perma stake more LEO, their balance sheet grows in USD terms which allows them to create more derivatives and products/services that drive more balance sheet expansion.
More derivatives = more markets to make = more profits to expand the balance sheet.
This kicks off a flywheel of market making where LeoStrategy can generate a moat around all the pairs they market make. For example, they'll have whitelisted lower fees on bLEO/pLEO/LEO/heLEO (and obviously also on LSTR-derivatives).
This means that they'll have a moat on Market Making. An absolute monopoly to make the markets and generate profits which are then used to add LEO to their balance sheet and create even more markets.
The flywheel is in its early stages right now. As it gains momentum, we will see an explosion of balance sheet expansion (more LEO on their balance sheet + a higher LEO price). This will = more derivative expansion and more balance sheet expansion.
The flywheel is already in motion. Watch the LPS (LEO Per Share) of LeoStrategy to see it unfold. We're at 21 LEO Per Share now (up from 15 just 2 weeks ago). This balance sheet expansion is nothing compared to what's coming.
Posted Using INLEO
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@sirsmokesalot96(13/15) tipped @khaleelkazi
Come get MOONed!
One of my the drawbacks about LSTR and SURGE is that they're currently only available to an audience that doesn't have a hard time acquiring or holding LEO. With MicroStrategy, one of the benefits of their strategy was that MSTR or some of their other vehicles made BTC exposure more accessible to financial entities seeking exposure, but not being able or allowed to get it directly. Bridging LSTR and SURGE to Solana would make a lot of sense in that respect, in that SOL holders could get easy exposure to LEO
I agree that bridging to other chains is important and that is in the cards (need to get the fund bigger to be taken seriously first)
However, you're looking at it too strictly
LSTR offers a leveraged long on LEO
SURGE offers a downside hedge (downside capped at $1) and income
These are two distinctly different value propositions than buying LEO outright.
For example, a lot of people take profits on LEO and push it into SURGE to be protected on the downside. It's much different than telling people to buy LEO or SURGE
Hmmmm