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(0) $LEO’s token economics remain one of the most interesting (and bullish) out there in the market today. At 10 Bn run-rate monthly traded volume, 0.3% take-rate, and 27% towards buyback, this translates to roughly 100 mm / yr towards token burn. @zhaodong1982 @zhusu
(1) …which at the $1.80 Px today w/ 1 Bn tokens outstanding, equates ~18.5x price to capital return (or ~5.4% of tokens to be retired every year) w/ all tokens outstanding subject to buyback; such economics can even be better than BNB’s.
(2) … which clears 35-40 Bn of volume / month, 0.2% take-rate, but only 20% of net profit towards buyback – which is around 130-140 mm / year towards token burn, and BNB will only retire 50% of tokens – so BNB is effectively 40-50x+ P / capital return & lower terminal value.
(3) The beauty to BNB is that its tokens are currencies for IEO participation, which similar to ETH in its ICO days locks up liquidity supportive of pumps. This perk has strong expected value (if not just temporary) – which LEO may not undertake judging from its upcoming IEO.
(4) …however, if LEO can stay transparent to its buyback (which looks like it will w/ the upcoming transparency page), this monthly, all-token-application buyback mechanism coupled with a infinite ROE exchange asset just spells dynamite in potential value appreciation.
(5) …some of the most ridiculous compounders in the equity market in the past 20-30 years, LO, TDG, CHTR, etc utilize this playbook to the max with stable assets and heightened leverage. As long as Bitfinex doesn’t blow up, it’s easy to see the Px straight up to the right.
(6) About the 850 mm Crypto Capital confiscation and ~950 mm Bitcoin hack, my hunch is whoever prefunded the ICO had some inside scoop w/ the Bitfinex management on recoverability probability, and it could be significantly higher than currently implied.
(7) …after all, hacker of the 950 mm bitcoin buying a ton of LEO and returning the BTC to launder its capital just makes way too much sense. The Crypto Capital thing is a longer-shot, but I can see Bitfinex selling this lien to any bank that may want to buy it on cents on dollar
(8) Game theory would suggest Bitfinex should significantly accelerate buyback (even beyond 100% of monthly revenue) prior to confirmation of capital return as to maximize value. There’s no stopping Bitfinex from levering up to accelerate buyback (important).
(9) …which I won’t be surprised to see if the 1 Bn USD backers have gentlemen agreement on implicit IRR to back the deal. It’s also likely insiders @ Bitfinex also own LEO in the presale (which I’d prefer). Bitfinex can to take out early backers @ predetermined price via blocks
(10) Beyond what I just touched on, there’s so many more tricks they can pull, all ahead of a likely bull-run in BTC circa 2020/21. Sure it could be risky as any ventures going against the US government, but boy isn’t this a solid play w/ robust economics?
