RE: What Moving LSTR to Base Could Actually Mean for Current LSTR Holders
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Ask Michael Saylor and Microstrategy. Or Strategy B. Or whatever it's called. In a word, yes. LeoStrategy is always going to be a buyer. Once LEO hits $100 they will still be creating vehicles like SURGE. The difference will be that instead of offering 500,000 at 80 cents and raising $400k, they'll be offering like 2M at $90 and raising $180M they can use to......wait for it.....buy LEO off the market and lock it up. $180M would theoretically buy another 1.8 million LEO off the market at $100, but when people see that they've raised that much and have the capital in hand, what do you think the price of LEO is going to do? It may double to $200 while the raise is happening. Now that $180M only buys 900,000.
The numbers get pretty crazy, but I'm telling you, they are real. As long as LeoDex, AI, curation, ads, etc., keep generating revenue, LeoStrategy will continue buying LEO off the market and locking it up. This is why Khal is predicting $1000 LEO by 2035. It's math.
I like Math! I just don't know how to do it lol.
For me, it's more that the LEO hype is only about the PROMISE that it will continue to grow because there will be sell pressure, there will be little of it, and who knows what else. When it grows to $10, it will be difficult to convince anyone that the price will continue to rise. And how will it grow then? Well, from the redistribution of profits from Leodex.io (and partly from external money from Leostrategy, but that could dry up overnight). OK. But the DEX world is already quite crowded, and competition is fierce and growing. So there will be an equilibrium where what @Leostrategy (and POL) buys will be sold by the same number of people. This will increase LPS and thus the price of $LSTR. However, the price of $LEO will remain more or less the same.
The only thing we can hope for is that profits from LEODEX.IO will continue to increase indefinitely, because that is the only thing that would increase the price of LEO. It follows that soon (and perhaps even now) it will be more advantageous to buy LSTR.
That is 100% not true. There are two different mechanisms that will raise the price of LEO. First is the normal buying and selling, where, like any stock, token, commodity, etc., if there are more buyers than sellers, the price goes up. If there are more sellers than buyers, the price goes down.
But the second mechanism is where it gets interesting. Scarcity. Not only is the LEO supply capped, it's deflationary. LEO tokens are getting burned every time someone bridges it over from one chain to another. Granted, it will never be a huge amount, but over a period of years, I could see maybe as many as a million tokens getting burned. But the REAL driver of scarcity is LeoStrategy. Every single day they will be buying LEO tokens from the open market and locking them up forever. This is where the LPS number comes in. Right now LeoStrategy is approaching 2.3M LEO tokens purchased off the market that will all be forever staked and locked into sLEO. This has just been from the last month and change. So instead of there being 30M tokens out there that could eventually be sold, there are now less than 28M. And every day they buy more. The goal is to get to 10M as soon as possible which will then mean that there will only be 20M left in circulation.
And this is all done through open market activity with revenue generated from inside LeoStrategy itself. LeoDex fees will be given to sLEO stakers as of September 23rd, and LeoStrategy will probably have close to 4M LEO tokens staked by that time. The rewards those tokens generate will go straight to buying more LEO off the market and increasing their stake, thus earning more rewards. And on and on. Obviously it will take a LOT more revenue to buy LEO shares off the market if and when they are trading for $100 than when they're trading for 10 cents, but the buying will still be there. They will still be locking up LEO every single day.
Yes, scarcity is fine, but is deflation really great for price appreciation? Look at Thorchain – in one year, it will burn about 1 million RUNE (which is something like 100,000 LEO burned or "permanently" staked compared to their maximum supply). The price of RUNE has not changed. Many people even think it's completely useless. But let's leave that aside...
But everything else you said, I also said in my previous post, only perhaps in more detail. In order for the price of LEO to exceed $10, Leodex.io would need to generate incredible and currently impossible profits. Because I definitely don't think that LEO will reach USD 10 without leodex.io earning more than USD 300-500k/month in fees to provoke a little FOMO and increase the APR for staking sLEO...
Either way, I believe we will get above $10 at some point, and sooner rather than later.
LFG
There's no question that LeoDex is probably the most important cog in the wheel at this point, but I think you are underestimating the influence that LeoStrategy will have on the ecosystem. The market-making/volatility harvesting, the ad revenue, the portfolio of products, the AI, and probably some more things we haven't thought about yet are all going to be funneling revenue into buying LEO and staking it.
I agree, burning tokens is virtually irrelevant to the performance of the token. In fact, I would rather see them use those tokens for paying out curation. The capped supply is enough. No need to whittle them away, especially since the small amount really isn't going to make much of a difference in the long haul anyway. Whereas adding them to the curation rewards could.