It's been a busy week so far, with a number of changes already flowing through as we kick the LBI project back into action.
I am looking for feedback from the LBI token holders on an important topic.
What do we do with nearly 40K LBI tokens?
While LBI was in a quiet patch, it bought back close to 40,000 tokens from holders that wanted to exit their investments. Those tokens are now sitting in the wallet, and a plan needs to be made for them. Currently, I am excluding them from the circulating supply for the purposes of valuing the fund.
The options are pretty clear really
Burn them all.
Sell them at asset backed value.
Find partners to token swap (at asset backed value.
Lets look a bit more at each option.
Burn them all
The easiest option by far, we simply send them to @null and they are gone for good. They are currently not being counted in circulating supply, so this option would be clean and simple.
The benefit of this is that they are no longer an issue with regard to anyone's share of the fund being diluted. Before we jump on this as the most obvious choice, lets just entertain the other options for a minute.
Sell them at asset backed value.
Listing the tokens for sale at asset backed price would not be dilutionary in terms of price. Currently, the ABV of LBI is 0.592 HIVE per token - excluding these 40K tokens from all calculations. If we sold them there would obviously be more tokens in circulation. However the assets would increase to match. Sell 10K LBI, we'd add 10K to the supply, but also add 5,920 HIVE to the wallet meaning the Asset backed value does not change.
What would change however is each holders Percentage share of the total fund. Each token would represent a slightly small share of ownership of the fund, although the fund would be bigger.
Is there demand on HIVE for $5K worth of tokens in a project that is currently in the middle of a relaunch after floundering for a while?
Find token swap partners.
The effect of this would be identical to the above option. Lets take @spinvest as an example. Each SPI token is backed by 5.87 HIVE worth of assets. Each LBI is backed by 0.592 HIVE worth of assets. This means each SPI is worth roughly 10 LBI. Say we swapped 10,000 LBI for 1,000 SPI. Then 10k more tokens are in circulation, but we have an equivalent asset coming on the balance sheet of the same value - meaning no change to the ABV.
An option, but do other investment funds want to back an unproven (under the new management anyway) token?
I just thought of another option.
We could just ignore those tokens for 6 months, and then revisit this topic once the fund is humming along nicely again. Put them in storage somewhere and forget about them. Once the fund has some fresh runs on the board, and a clear growth track record, we may be in a much better position to unlock value from them.
Honestly not the worst option now that I think about it.
Let me know what you think.
There is a related issue I'd like to raise and get some feedback on.
When you issue a token on Hive Engine, that token has an account the has control of it - the owner account. It can perform actions like minting new tokens and so on. In the case of LBI, that owner is @spinvest. Now, there is another 40K of LBI tokens that, theoretically, could be minted by Spinvest into circulation. SSUK has brought this to my attention.
In the long and the short of it, I'm perfectly happy for @spinvest to retain "ownership" of the back end stuff. Having a trusted third party playing that role is not a bad thing, and it could be seen as a safeguard in this case. However, the 40K tokens that can be minted is clearly a problem.
On this issue I do have a very strong and clear preference. I want @spinvest to mint those tokens, and then immediately burn them. This would hard cap the LBI supply, and ensure that no more tokens can come into existence.
Feel free to add any input. They could theoretically be minted and added to the current 40K tokens held by the fund to be used for a future fundraise. But my preference is a nice, quick and clean mint and burn for these, and lock the LBI token supply down for good.
I'd love to here from existing LBI token holders which of the options for the first 40K you would like me to pursue. If there are mixed opinions I'll likely run a governance vote fairly soon. If the preference of active token holders is very clear, then I don't think a vote is really needed. We shall see but please do drop a comment and let me know what you would prefer.
Thanks in advance for taking the time to read this, and giving your feedback.
Cheers,
JK
@jk6276