What Moving LSTR to Base Could Actually Mean for Current LSTR Holders

The LeoStrategy (LSTR) token and the SURGE token are moving to the Base blockchain. For all intents and purposes, the decision has been made. The only issue still in question is when. Is LeoStrategy going to give the Inleo community a little more time for their HIVE powerdowns to occur, or are they champing at the bit to get SURGE sold out and moving it #soon? Either way, it's happening. If not this week, then almost certainly within the month. Once there, the LeoStrategy team feels very confident that SURGE will sell out in very short order.

Let's do some Numbers

Assuming about 350k SURGE get moved (the other 45k get soaked up by LEO/HIVE users), that means LeoStrategy will have about $350k with which to buy LEO off the market (350k x .90= $315k on Base--45k x .80= $36k on Hive). They have already bought well over 2M LEO over the last month and change. The LEO price has gone from 2 cents to 26 cents and back to 10 cents over that time frame. That happened with roughly $200k. LSTR raised around $80-$90k and SURGE has raised another $80-$90k. Throw in the fees from LeoDex over the last month plus some curation income from Hive delegations and the number should be somewhere in that vicinity. These are all educated guesses, but they should be close.

What do you suppose $350,000 worth of buying will do? I would think at the bare minimum it should take another 1M LEO plus off the market and lock it up. 1M LEO at an average price of 35 cents equals $350k. 2M LEO at an average price of 17.5 cents equals $350k. So, in my estimation, the number should come in somewhere between there. Let's call it 1.4M. That's a 25 cent average. Where does that put us?

First, it takes the LEO per Share (LPS) of LSTR up to at least 37. It also allows LeoStrategy to create their market makers and start harvesting volatility. It probably adds some visibility to LeoDex (especially with perps coming), generating more fees. Lastly, it taps into the Base blockchain and the billions of dollars traded there daily.

To that last one, here is a chart of Base's daily transactions over the last couple years.

Per the chart from BaseScan, they've been doing between 8-12M transactions A DAY over the summer. That is a LOT of capital flowing around. Once LSTR and SURGE are connected to the blockchain, the LEO economy will start having access to that capital. And if SURGE sells out as fast as the team thinks it will, there will probably be an appetite for a lot more. Especially once they latch on to how the tokenomics of LEO work.

How will that Affect LSTR?

Who knows what that could mean for the LEO token. $1.00? $3.00? That's anyone's guess. But the token that I think could really get interesting is LSTR. Remember, there are only 100,000 LSTR tokens in existence right now and chances are that some of the SURGE buyers on Base are going to want some. That means one of two things should happen, probably both.

One, and probably the most likely, LeoStrategy will come out with another LSTR offering at a significantly higher price point.

When the first batch of LSTR came out, the LPS was well under 10 and investors were taking a significant risk. They had to blindly trust that LeoStrategy would use the funds the way they said they would, and the LPS would climb significantly, making the investment worthwhile. That obviously happened. LeoStrategy has been true to their word and has been transparent about showing their transactions. The LPS is now well over 22 and headed to 25+ quickly. But, as stated above, if SURGE sells out, that LPS number probably jumps to the upper 30's at least.

That means the next LSTR sale will have to have a price point significantly higher than the first one. If LEO is trading at 50 cents and the LPS is 37, that's an $18.50 LSTR. If LeoStrategy offered another 10,000 LSTR at $20, that would be $200,000. $200k would buy 400k LEO, raising the LPS by 4 but dropping it again by about 4 since the new 10,000 LSTR would dilute the current 100,000 by 10%. Overall, however, that is still a big net positive for LSTR and LEO holders alike. Liquidity would go up dramatically with new investors coming on board. It would also soak up another large chunk of weak LEO and forever take it off the market. The LEO price would continue to face relentless buying pressure and the market cap would finally reach a level where some of the outside world might begin to take notice.

As @taskmaster4450 and others, myself included, have talked about before, the vast majority of the "real" money in the world won't even look at something valued under $100M. The big money doesn't want the risk. But, as an entity begins to prove itself and its sustainability, it starts to show up on more and more radar screens. This is where the growth of LeoDex coupled with LSTR and SURGE on Base can really pay dividends. Both of those facts bring visibility and, more importantly, credibility to the Leo Ecosystem. The movement of the token (up 2500% at 50 cents) would also attract attention. Throw in the fact that LeoStrategy will probably be introducing a few more products along the way, and you've got a deflationary token, with constant buy pressure due to internal revenue generation, a vibrant community, and a portfolio of investment opportunities, both risk on and risk off. What more could you ask for?

Once outside people take a hard look at how this is all synergistically designed to do one thing and one thing only--drive as much value into the LEO token as possible--it is only a matter of time until more outside money starts getting involved. And the bigger the market cap grows, the bigger the capital that will be available to tap into. It's a self-sufficient, self-sustaining model that will grow with or without new players. The only difference is how fast it will happen.

LSTR: Up and to the Right

In the meantime, while LEO is slowly advancing, battling rounds of selling before making each leg up, LSTR will be trading on Base amidst all that capital moving around. Even if the LEO price stays the same, the LPS will constantly be moving up and to the right, which means a flat LEO price would still call for an upward trajectory on LSTR. LEO at 50 cents puts LSTR around $20. LEO at $1 puts it at $40. This is assuming an LPS of around 40 by then.

In conclusion, there is still a lot of LEO to be sold out there. The token is back down to 10 cents after all. But with the move to Base and "perps" coming to LeoDex, the visibility and access to capital is going to grow immensely in a very short period of time. What this means for the price of LEO is anyone's guess. What we DO know is that LeoStrategy will have a lot more firepower with which to buy it off the market and lock it up. This in turn will move the LPS number up and to the right, which, in turn, should translate into a growing LSTR price regardless of whether the LEO price jumps or not.

The longer LEO stays down, the faster the LPS number can grow, so LSTR holders should benefit either way. If LEO stays cheap, maybe the LPS goes to 50.

20 cents x 50LPS=$10.

If LEO jumps to say 50 cents, the LPS obviously won't jump nearly as much.

50 cents x 40LPS=$20.

20 cents is a double for LEO but a 4-5x for LSTR. 50 cents is a 5x for LEO but an 8-10x for LSTR.

Either way LSTR wins.

Last I checked, there was still about 160 LSTR available for around $2.25 or less. Once this move to Base occurs, I'm pretty sure those will be long gone. NFA, but once this thing really starts moving, you may never get these opportunities again.

Leo is the Way!

Posted Using INLEO