Build a cryptocurrency investment fund for LEO holders as a LEO Burning alternative

Build a cryptocurrency investment fund for LEO holders as a LEO Burning alternative

By Behiver | behiver | 11 Dec 2020


Leo Finance follows a burn tokens model from the Ads revenues that should improve the price and maintain a scarce supply. While this might be a good model for cryptocurrencies that are stagnating and don't have much action (@taskmaster4450 explained this very well), on the Leo Finance community the burning tokens might not have a great impact as expected. Having this as a starting point we should think of different other ways in which we could monetize better the ads revenue.

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In my opinion one way to put more value into the LEO token would be to use the Ads revenues as an investment funds into other well established cryptocurrencies. The LEO holders should receive a proportional ownership in the fund based on the LEO tokens that they have staked. We can buy each month into this fund some cryptocurrencies that are pretty stable on the market and they've proven themselves over time - like Bitcoin, Ethereum, Rune, Monero or other such tokens.

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In this investment fund model the value will come up from different perspectives.

  • Leo holders would be motivated to stake their tokens in order to increase their participation percentage into the investment fund. This should provide scarcity on the market, thus driving the price of LEO up.
  • Leo holders would be motivated not to sell LEO regularly in order to be an investment fund member
  • The cryptocurrencies from the investment fund can be put at work through different DeFi tools like Liquidity Pools, Lending, Staking or other Promotions that simply increase the tokens by using them as collateral instruments, airdrops or other opportunities on the market.
  • The investment fund can have a minimum limit for LEO holders in order not to accumulate dust and complex mathematics for participation and distribution. Whether that is 1,000 or 5,000 or 10,000 LEO staked can be decided altogether. This will also motivate some users to reach that threshold and bring more content to the site.
  • Leo holders will diversify their investment through holding additional crypto assets beside LEO

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Challenges with this model:

  • We need a distribution model or one way to pay the dividends to the LEO holders as we need the fund to be decentralized and the users really get their hands on the assets. That or a fund governance system to see what to do with the fund, if liquidate assets or other movements within. If we could have a smart contract over the investment portfolio that would be pretty crazy but I don't see how that could be achieved as we still have to invest the assets to produce more.
  • LEO token might be as strong as the investment fund is and might relate to other external factors beside the wellbeing of the Leo Finance itself. It should be just a smaller component of it and not pegged 1 to 1 with the investment fund.

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Hopefully this doesn't sound too silly and we can debate whether is a good idea or not. Or at least it should be a starting point to bring more value into the LEO token beside just the income from the ads revenue which might justify its price in time. We see so many external investment funds built on LEO itself - like the @lbi-token - and we could embed such a model also within the ecosystem itself. That would be complex, but would ensure increased value over time. Lay your thoughts and feedback about this, good or bad or maybe provide some other alternatives that you might have thought.

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Behiver
Behiver

Everything on diversity. Crypto enthusiast, stocks and finance interested, blockchain games and anything related to these.


behiver
behiver

Cryptocurrency and finance topics

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