BTC and the rest of the crypto market have corrected HARD since the launch of LeoStrategy. This correction has led to quite a lot of turmoil for the LeoStrategy portfolio of products. Not only have the presales slowed in terms of momentum, we've also seen the token prices decline as they are tied intricately with the broader crypto market through LEO.
Low LEO prices are good for LeoStrategy in the long-run. We are able to buy LEO very cheap and accumulate it permanently in our treasury. Eventually, LEO will trend higher and the treasury will be worth exponentially more which then increases the backing of LeoStrategy assets + allows us to continuously acquire additional LEO.
Short-term, low LEO prices can lead to our assets de-pegging. LeoStrategy is a very new and big idea. It must be said that we have continuously kept logs and detailed information related to our protocols, tokens and project in general.
Economics live at the core of how LeoStrategy operates which is why we must outlay the concern of these massive depegs.
We've spent a lot of time discussing and working behind closed doors about the solutions at hand. We hear from users and holders that these tokens are de-pegged vastly below where many believe they should be.
We completely agree and we have collected the data and created a plan to correct this.
Introducing LeoStrategy Recover
live tracking at https://leostrategy.io/recovery
LeoStrategy's Asset Mix is not intended to be a static mix. These assets are dynamic and their designs must be dynamic as well. Staying too rigid can lead to a break in the system.
We're operating on the bleeding edge of FinTech and this means having an evolving approach. Doing what is in the best interest of the token holders of the various assets we've deployed.
LeoStrategy's assets have a dynamic design. The RWAs were designed to increase yield as the price decreases which is intended to drive demand and increase the price of assets back to their peg.
In theory, this is a great design however in practice; this has not been happening. The prices have fallen alongside the rest of the crypto market. Despite yields constantly increasing, the prices aren't correlating back to their pegs.
This creates larger and larger yield obligations for LeoStrategy while hurting the holders of the tokens + ruining the value proposition of "holding 1/100th TSLA" (for example with Tokenized TSLA).
The Road to Recovery and a Better Peg Model
Our plan to recover the pegs for SURGE, TTSLA, TGLD and TNVDA is quite simple: Stablecoin yields are still paid but instead of paying liquid stablecoins, they will rebase into token buybacks.
This means that 100% of yield that would be paid as stablecoins is instead used to fuel RCBF Buybacks of each token.
In simple terms, if $1,500 per week in SURGE yield is obligated in terms of Stablecoin yield; that yield will be used to purchase $1,500 per week of SURGE and permanently hold it in the RCBF.
The same goes for TTSLA, TGLD and TNVDA. These assets will all have their yield rebased into perma-buybacks until the pegs are recovered.
Token Upside
As a token holder, you're getting stablecoin yield up until this point. During this Peg Recovery phase, your yield is being auto-rebased into buybacks of the token themselves.
From an economic perspective, you are not losing anything. Instead of getting liquid yield, your existing tokens become worth exactly the same $ value more as the yield you would've gotten (likely even more as perceived recovery = real recovery).
As the tokens recover, the prices will increase even more than strictly the USD used to buyback the tokens via RCBF.
For example, someone holding $1,000 worth of SURGE right now is getting 15% APR per 1 SURGE held.
With the recovery plan, a peg recovery to $1 per SURGE (from current $0.50 price) = a 100% ROI (2x on the current price).
This is equivalent to 7+ years worth of SURGE yield. The ROI is accelerated by the perceived recovery of the pegs.
Post-Recovery
We expect the pegs to recover rather quickly under this model. Relatively speaking, the float is not very large for these tokens. Buying back thousands of dollars worth of SURGE, TTSLA, TGLD and TNVDA each week will lead to a surge in recovered peg prices.
Once pegs are recovered, SURGE yield as stablecoins will transition back from rebased yield to liquid stablecoin yield.
The RWAs will get an economic model update. We have a design to dramatically improve the peg of RWAs by introducing a Hard PSM Conversion Module. This is similar to what we've designed for ACE which we believe to be a vastly superior model for maintaining ~2% of peg price.
- 1 SURGE should always be worth ~$1 (within 10% as a bond)
- 1 TTSLA should always be worth ~1/100th TSLA (within 2%)
- 1 TGLD should always be worth ~1/100th TSLA (within 2%)
- 1 TNVDA should always be worth ~1/100th TSLA (within 2%)
Post-Recovery, this model will be dramatically improved by introducing the PSM for conversions. Yield will resume as stablecoins and the conversion mechanism will hard-peg all of the assets. Leading to more trading volume around the pegs which means more Market Maker profits for LeoStrategy which means more daily LEO Purchases.
The current model of these assets has been a strain on LeoStrategy's perception in the market. We are healthier than ever and delivering more technology, features and new revenue streams than ever before.
LeoStrategy.io/predict launched last week and is already generating revenue for the Treasury. This revenue is used to purchase LEO and perma-stake it on our balance sheet.
The de-pegging of our asset stack has led to FUD around the project. LeoStrategy.io/recovery solves this problem and allows us to build the future of FinTech.
By LEO, for LEO.
FAQ
Why are stablecoin yields no longer paying out?
This is actually not true, though some may perceive it this way. Stablecoin yields in fact continue to pay on all of these tokens. Instead of paying liquid yield, they are rebased into your token value. So if $2,000 per week was being paid as stablecoin yield before, $2,000 per week is still being paid. It's just being paid to the RCBF to purchase SURGE, TTSLA, TGLD and TNVDA off the market and perma-hold it to increase the price.
For more FAQs like this one, view them on https://leostrategy.io/recovery.
