LeoStrategy Has Acquired 10% of the LEO Supply
LeoStrategy is a permanent-capital vehicle that is designed to deliver financial products, services and tools to the LEO Ecosystem with a singular mission: acquire LEO and permanently stake it as sLEO on our balance sheet.
Every mechanism of LeoStrategy's existence is designed to generate accretive capital that is used to purchase LEO off the market and permanently stake it. The LEO we purchase will never return to the market. It is simply locked away in the LeoStrategy vaults as sLEO. Our sLEO earns USDC from https://leodex.io/leo and the USDC earned is then autocompounded into more sLEO. Creating permanent buy pressure as we continually and relentlessly remove LEO from the market and stake it in our vaults.
This Week, LeoStrategy Reached 10% of the Total LEO Supply
LEO has a max supply of 30M tokens. It has LeoBridge burn mechanisms which generate revenue from Bridging fees. 100% of that revenue burns LEO. With LeoDex staking rewards going live last week, a lot of bridging volume was generated. This bridging volume led to nearly 1% of the LEO supply being burned in a single week.
The total LEO supply is now ~29.5M. LeoStrategy's balance sheet now owns 2,985,788.39 $LEO which means we have acquired over 10% of the total LEO that can ever exist.
This also means 10% of the LEO Supply can never reach the open market. LEO is an extremely scarce asset with a community and ecosystem that continually drive it to become more scarce:
- LeoBridges burn the LEO supply, creating deflation every time a user bridges across chains
- LeoDex POL autocompounds USDC rewards to perma-lock LEO off the market
- LeoStrategy builds products to generate funds to buy LEO and perma-stake it off the market. Then we autocompound to continually take more LEO off the market. Expanding our balance sheet and perpetuating our fund strategy
The LEO supply on the open market is dwindling. This hyper scarcity will be met with continual demand. What happens when you have a scarce supply and an ever-increasing demand? Number go up.
LEO Yield | 7.55% Weekly Yield, 392% APR
LSTR holders experienced a 392% APR yield over the past week. We added 209,562 more LEO to our balance sheet which increased LPS from 27.762 to 29.858.
If you annualize our growth rate, we are on pace to acquire an additional 13M LEO tokens within 1 year. As LEO becomes scarcer, it will become increasingly difficult to purchase more LEO.
The equation is simple: as LEO becomes more scarce, LeoStrategy will need more USD to fund more LEO purchases. As we continue to purchase more LEO, LEO becomes worth more in USD. As LEO becomes worth more in USD, the fund's value grows exponentially:
- Our LEO on the balance sheet grows
- The value of LEO on the balance sheet grows
This exponential growth leads to a hyper-expansion of LeoStrategy Products, Services and Tools. LeoStrategy products are designed with a singular focus: generate profits to purchase more LEO.
LSTR Performance, Using P/E Ratio Analysis for mNav and Why mNav Premium Should Be Much Higher
LSTR is trading at $5.03. Meanwhile, LPS is growing at triple digit APRs every single week. This means that the velocity of growth is continuing but the LSTR price isn't reflecting it yet.
A 30% mNav premium is the leading indicator here. Consider how P/E ratios work on the stock market: buyers of stocks are purchasing a company at some multiple of their earnings. For example, if you buy AAPL today, you are paying $38.76 for every $1 of earnings per share the company generates (their current P/E is 38.76).
In LSTR's case, as a buyer you are buying 1 share of LSTR at $5.03. This 1 share represents $3.88 of LEO value backing it (the current LEO Per Share = 29.858 = $3.88 at current prices) + you are buying the future LPS growth of that LSTR share.
At the current growth rate, LPS would reach 1,314.63 LEO per share in 12 months. If LEO trades at $1 by then, the value of LSTR at the same mNav premium as today would be $1,709 per LSTR share.
Now, some math needs to change here. The LPS growth of LeoStrategy will compress. Why? Because LEO has a fixed supply of now 29.5M LEO (and dropping). The LPS of LeoStrategy can only grow so big as we continue to acquire more LEO.
Let's use some other figures: let's assume that by December 31st, 2025; LeoStrategy owns 10M LEO and the total LSTR shares in circulation are 150,000 LSTR. These numbers are our rough projections (a bit high on the LSTR side for a safety net).
At 10M LEO and 150,000 LSTR, the LPS would be 66.66 LEO Per Share of LSTR in circulation.
At the current mNav (though we expect this premium to grow as Lions start to realize how to properly value future LPS growth into the mNav Premium): LSTR would be worth $86.67 if LEO is worth $1.
- LSTR worth $86.67
- LEO worth $1
- LPS at 66.66 LEO
- 150,000 LSTR in circulation
- 10M LEO Held as sLEO by LeoStrategy
This means that if you buy 1 LSTR at $5.03 today, you are not only buying the $3.88 worth of LEO that currently backs it; you are also buying the velocity of growth in the future as LeoStrategy's LPS grows.
SURGE Nearly Sold Out
We've officially launched the SURGE & LSTR contracts on the Base Blockchain. The Bridges are live and being tested as well. We are ready to launch any day now.
Our HE Market Makers are LIVE.
Our Cross-Chain Market Makers are LIVE (for LEO).
We're tweaking these Market Makers to make them as efficient and effective as possible. This is a key implementation before we launch the SURGE & LSTR pools.
The SURGE sale is now 68% sold out. There are less than 161,000 SURGE available on the market right now.
A few people have asked what happens when SURGE sells out?
The simple answer is:
- $50,000 in Liquidity Pools are seeded on both Base and Hive-Engine
- SURGE's LPs are priced at $1 per SURGE (an instant ~40% profit for presale buyers)
- SURGE on Base will start paying USDC (or you can continue to hold on HE and get HBD for dividends)
- Our Cross-Chain Market Makers start market making SURGE and profiting. Profits buy more LEO for our balance sheet
- Our HE Market Makers do the same
- LPS continues to expand exponentially
- LSTR rises toward $50 and beyond
- SURGE holders can optionally convert their SURGE to LSTR and capture the upside
Some people seem to be confusing SURGE for a stablecoin. SURGE is NOT a stablecoin. SURGE has a floor price of $1 but it is more like a lottery ticket on the future upside of LSTR.
Imagine a lottery ticket that guarantees you do not lose money because it can be traded back in for $1 at any time but also makes you money if you win because it can be swapped into LSTR in the future and sold to USD to materialize profits. This lottery ticket also pays you income every week while you wait to win.
That's what SURGE is:
- $1 floor price through the liquidation preference (SURGE holders are always paid out first at $1/SURGE) guarantees your downside is mitigated
- Unlimited upside (SURGE can trade at $1.10.. $1.20... $1.50... $3... $5... $10...) because of the conversion to LSTR Option: this ties SURGE to the performance of LSTR. As LSTR rises, SURGE rises
- Dividends while you wait: SURGE pays $0.15 per 1 SURGE every week. If you buy at the presale price, that is 20.80% effective yield that is being paid to you while you wait for your winning numbers
SURGE is selling out double digit %'s each week now. As the presale continues to sell more SURGE, the velocity of it selling out continues to go up. Will we write this blog post next Monday and update you on LPS to also celebrate SURGE being sold out? We think so.
Buy SURGE's limited-time presale at a 40% discount -> https://tribaldex.com/trade/SURGE
Posted Using INLEO
Personally, I don't think it's a good idea to seed the LPs at 1$. This is going to cause a lot of dumping SURGE, which basically means just yield for the fastest sellers, at the expense of the fund and therefore LSTR and LEO holders.
I think it would be better to gradually deploy liquidity at prices closer to the current price, watching sell levels on Tribaldex closely. That way, you don't just evaporate a few k dollars in liquidity that will be extracted in the first few minutes after launch.
I know you want the price to go to $1, but only the market can get it there, not the initial liquidity pool setting.
That’s not how SURGE is designed
SURGE has a minimum value of $1. If anyone sells below $1, it’s free money for anyone who buys it
Also, as the price goes below $1, the effective APR increases
SURGE has no capped upside. I expect it will traded north of $1. Who cares if a few people dump it out of ignorance. That means profit for whoever feels like profiting off them
Efficient markets are efficient. I suspect we’ll see SURGE vastly outperform people’s expectations
I didn't mean to disagree with the $1 proposition, just saying that deploying LPs like that will lead to an immediate arbitrage and the price will fall significantly below $1 anyway, which means a waste of the funds resources, that's all.
If people dump their surge into the LP... I'm picking up the cheap SURGE.
Fair enough, just means some people will extract a few thousand dollars on the way. Just saying that if the perceived fair value of SURGE was indeed $1, SURGE would've sold out immediately. The reason it hasn't is there's enough doubt about the ability to flip a large chunk of SURGE at $1, so anyone buying just buys a smaller chunk, not $100k worth. Otherwise this would be the investment of a lifetime, spend 100k now to get 135k out immediately.
Don't get me wrong, I'm not criticizing LSTR or SURGE, just pointing out what the market is likely going to do with the situation at hand, independently of the intentions or the long term outlook.
Congratulations to Leostrategy and everyone holding LSTR and SURGE. The beauty of the future is just unveiling.
We keep working hard everyday to deliver the best results 🦁