Leo Ecosystem Analysis - LeoDex, LeoStrategy (SURGE, LSTR), INLEO

The Leo ecosystem has undergone some substantial transformation in the past several months.

• $LEO is no longer a Hive native, Layer Two token, but rather an "Arbitrum Native" token with wrapped versions available on BNB, Polygon, and Hive.

• Total LEO supply is capped at 30,000,000 and no additional LEO will be generated under the existing contracts.

• A LSTR token was created by @leostrategy with the express purchase of using revenues from the sale of LSTR to purchase LEO.

• 100,000 LSTR tokens were minted for the presale on Hive Engine out of a possible 1,000,000.

• A SURGE token was created by @leostrategy with a fixed yield based on a value of $1.00 per token, a portion of the revenues from the sale of surge were reported to be set aside the first six (6) months of yield payments.

• Liquidity Pools will reportedly be established for both SURGE, and LSTR on BASE within a matter of days.

• SURGE tokens held on Hive receive yield in HBD or LSTR, SURGE holders on BASE will be paid yield in a US dollar denominated stable coin.

• LEO can be staked on the LeoDex platform for a a proportionate share or swap fee revenue.

• LeoDex primarily appears to be operated in the Thorchain/Maya ecosystem, Maya is a fork of Thorchain with a similar token schema.

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According to X Scanner which tracks exchanges and swap interfaces in the Thorchain/Maya ecosystem, LeoDex was ranked 13th for Earnings, generating approximately $3,050 in revenue from swaps. LeoDex's dashboard indicates that approximately 2,035,500 LEO have been staked on the site current valued at ~$262,580. Without compounding if LEO maintains it's price and LeoDEX maintains its revenue that is approximately 14% APY. Presumably some transaction fee is charged to collect the site revenue distributions, though it may be a negligible fee for larger positions.

Khal from InLeo has stated he believe he can grow the volume and presumably fees generated by LeoDex, which would correspondingly raise the APY for staked LEO. Unless the token is forked or site mechanisms are changed the revenue can has dilution limit, given that ~7% of existing LEO is already staked at LeoDex. The bridge established between Hive Leo and Arbitrum Leo burns 10% of the transferred LEO further reducing supply, but also negates a portion of a potential stakers effective yield if they choose to use the bridge mechanism.

The term "flywheel" is used to describe the price growth in the LEO token by Leostrategy. Bootstrapping may be more appropriate as most of the largest holders of SURGE and LSTR also are substantial holders of LEO on Hive. The vast majority of circulating LSTR and SURGE are held by a relatively small number accounts. Of the ~300,000 SURGE that have been sold the top 20 holders own ~78%. The distribution for circulating LSTR is similar; the top 20 holders own ~77%.

Essentially LEO holders have purchased more LEO via proxy mechanisms.

A substantial input to the Leo Ecosystem may be diminished as Leo holders move assets outside of Hive. Voting on posts associated with LEO. A substantial portion of HP held by LEO enthusiasts has been powered down and been converted to other assets. If LEO related content is seen as substantially as a net outflow from the Hive economy, then users may be reluctant to assign value (upvote) that content.

The Hive Analytics tool @hiveanalytics from @themarkymark indicates a moderate decline of unique users creating content over the past 30 days. It should be possible to measure the aggregate value of LEO ecosystem curation over the next months and approximate an impact if any.

It will be interesting to see if enthusiasm or interest can be generated in the LeoStrategy tokens outside of the Hive Ecosystem, when liquidity is moved to BASE. Reports today have indicated that LeoStrategy may create a lending platform where users will be able to utilize staked-LEO (sLEO) as collateral for loans. The details of that platform have not yet been definitively detailed, but the mechanism could certainly sequester some significant portion of LEO.