Hello and welcome to this 1st proper introduction post to the Leo Community from LeoBacked Investments. In this post, I will go over a few basics of what LBI is and what it will become. Think of this post as the blurb of a book, we'll look at alot of different things but not go into full detail because subjects such token distribution, fund governance etc will require full posts.
What is LBI?
The LeoBacked Investment (LBI) token is the first of it's kind, the 1st token to be valued completely in LEO. Each LBI token represents a percentage ownership in the overall fund including all LEO, HIVE, off-chain and wallets operated by @lbi-token. The goal is to provide a community based and ran investment vehicle focused primarily on the LeoFinance community and LEO token. We will provide a weekly LEO dividend payment to all token holders whilst also increasing the value of the LBI token slowly but consistently over the long term by only investing into things that will stand the test of time. Long term we hope that by staking 100,000+ LEO from future token sales will to help remove some liquid LEO from HE wallets thus adding scarcity to the LEO token price.
Big claims, I know...
Down to business
First off, I will introduce myself. My name is @silverstackeruk, SSUK is good if you're ever chatting with me. I am probably best known if known at all for creating @spinvest which has been a roaring success from launch 20 months ago. Im fully committed to SPinvest and the evidence is on the blockchain. I will be overseeing this project and it will have my full attention. I am very interested in seeing how this turns out based on the feedback so far and I have the highest hopes this is will be a success. I try to keep things simple and transparent, I find people like that. If you ever have any questions, want a chat about LBI or another SPinvest token, I am on Discord daily and my door is open.
- How LBI will be issued
LBI tokens are backed by and priced in LEO, they will only be issued for LEO. All tokens sales will be done manually by sending any amount of LEO tokens to @lbi-token (not yet, calm your jets). As LBI are hive-engine tokens, people are free to exchange them in HIVE but beware that only buying LBI token directly from @lbi-token will increase the fund.
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Why only LEO? Because it's a LEO fund and every token is backed by at least 1 staked LEO. As an example, LEO is currently 1.50 HIVE and we issue someone 1000 LBI tokens for 1500 HIVE and then the price of LEO jumps 20% to 1.80 HIVE. Im sure you can see the problem because 1500 HIVE will not buy 1000 LEO tokens if the price jumps resulting in LBI tokens not being backed by 1 LEO. I understand it sounds very caveman but it's the way it has to be to ensure all LBI tokens are backed by at least 1 staked LEO. Im very anal about this as it's the projects USP.
- How many LBI's will be issued?
Ok, so I have created 1 million of these tokens based on the fact that we can always burn unneeded ones but we cant create more. The target was 100,000 but from feedback and hearing that some people were even unstaking LEO to buy LBI has me thinking it's possible we can issue more and aim for 250,000. The plan will be to hard-cap this token by the start of 2022 or before. We might are might not have a wrapped version by then but it's about 4-6 months to early to talk about that. The LBI token will be hard-capped but you'll have around a year to get involved.
- What happens on day 1? (7th Dec)
A post will be released from this account to let you fine people know that LBI's tokens are for sale. People should have to wait too longer than 12 hours to receive LBI tokens but I have the day booked off work (yes, i have normal person job) so I'll be online most of the day. All LEO tokens received will be staked to the @lbi-token account and we start earning from day 1.
- How do we make money?
We will make money in lots of ways but to start off for the first few months, we will do it the old fashioned way by grinding out good content and curating. After we have a few months of earnings behind us and have a small army of LEO miners and mega miners we will turn our attention toward the wLEO liquidy pooling. We start slow and build the foundation of a solid fund that will provide consistent LEO incomes and then and only then will we look into outside investments for income if desired.
- How do you make money?
As an LBI token holder, you are a part-owner in the fund and any profit made by LBI will be part yours. You will receive a cut of all earnings and your LBI token holding will increase in LEO value.
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As an example using easy numbers. There are 10,000 LBI tokens issued meaning @lbi-token will have 10,000 LEO staked to its account. You own 1000 tokens giving you 10% ownership of supply. In the first week, we make 1000 LEO. 50% is paid to token holders as a weekly dividend, 40% is reinvested into LBI and 10% goes to SPinvest's @spinvest-leo account to be staked. After the first week, you would receive a 50 LEO dividend and your LBI tokens would each be worth 1.04 LEO. Let me show you.
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50% of 1000 LEO is 500 LEO, you own 10% of supply = 50 LEO
40% of 1000 LEO is 400 LEO, 10,000 staked LEO plus 400 = 10,400 LEO divided by 10,000 tokens is 1.04.
- You need to cash out and get access to your funds
We understand that sometimes poo hits the fan and people might need to cash out their tokens. We also understand the pain of trying to cash out everything worth more than $10 on hive-engine so we offer liquidity to token holders in the form of a 95% buyback. This means we will buy back your tokens for 95% of their LEO value. We fund these buybacks with LEO holdings from the fund. It'll take some time for us to build up liquid balances are have access to larger amounts LEO faster but fingers crossed no LBI whale decides to cash out within the first 6-12 months. SPinvests biggest cashout to date is $4996, from being asked for the buyback price to transaction complete in a few hours, quicker than the bank. I do have to note, we were holding 10k tether at the time which made it very easy but the proof in the pudding (blockchain) they say. LBI buyback offer will start 3-6 months after launch.
These subjects are things that will 100% have other posts dedicated to them. How we earn LEO, what we invest into, what sort of content we produce will be ever-changing. The things below are the foundations that will either never change or very rarely change.
- Fund Governance
LBI tokens holders will hold governance and ownership over the fund. LBI's fund's will be under SPinvest's management. SPinvest does not hold any governance weight are ownership over the LBI fund.
Governance voting can be done by post to include, making investments, changing the rules, etc. Token holder voting weights are not yet finalized but will be based on token holding scaled-down for bigger token holders. In a nutshell, whales dont carry all the governance power so someone that owns 10% of the fund might have a governance voting weight of 5% were as someone with 1% of the fund might have a 1.5% governance vote. This helps to empower the 99% and makes it harder for whales to manipulate the fund model/structure.
- Token distribution
80% of tokens will be issued for public sale and 20% will be reserved for the team to be rewarded on a fund performance-related basis. The 80% public sale explains itself, the 20% team fund needs more detail.
From past experience with other projects, content producers are the core team. They are the face of the project, the ones that are putting the information out there, the ones that treat the project as their own baby and understand their words and actions can have an effect on others savings. I think these people that are yet to step up should be rewarded when the fund performs well. Content, believe it or not, will be the driving force that gets our wheels rolling in terms of earnings. Even now content drives around 50% of SPI's weekly HIVE week earnings. Our content team will need to be incentivized to produce a post a day for us and a good post as well. Content is super important not only for producing an income but also for relating information to token holders, gathering feedback and just straight promotion as well. People like consistency and we like to offer it.
One thing I can say with certainty is that content team rewards will not be pre-issued, they'll have to work for them but with a small team of 3-4, someone could have the potential to own 5% of the supply if all targets are hit. The plan is to have all team tokens issued but the time LBI tokens are worth 5 LEO each so it's something that requires a multi-year commitment. I stopped posting from my personal and gave up all my HIVE/LEO earnings to ensure SPinvest succeded, we need that level of commitment from a content team. Im not saying dont post from your personal account but if it's your day to upload and you dont and I see you upload from your personal, we'll have problems. The theory is by the time we hit all the targets, we will have a 5 LEO LBI token price and have other passive income streams that will make us less dependent on content earnings plus a 5% stake will/might be enough to keep someone incentivised based on their dividends payments.
Content producers will receive rewarded LBI tokens when token price targets are hit like 2 LEO, 3 LEO as the LBI token price is a reflection of the total fund value. The result will something like, the LBI token price hits 2.00 LEO in say 2 years and the team gets rewarded 2% of the 20% content team reward fund. The result would be a new LBI token price of 1.96 LEO. You as an investor will gain a lot more than you lose if you bought in for 1 LEO and it would only take a few weeks to get us back over 2 LEO again.
FYI - I had played with an excel sheet looking at maybe sharing post rewards with authors 50/50, 70/30 but it turns out its much better long term to give away 20% of tokens once compared to 50%/30% of post payouts forever. By the time all 20% is issued, we will have built up enough good passive incomes so that posting will become less important for earnings. I dont like the idea of cutting our income in half in the beginning while building the foundations. I understand 20% is a lot but if the LBI price does not go up, 0% of that 20% will be released and based on the example above, rewards paid out, in the beginning, would be peanuts. Im thinking long term, not 2-3 years, im thinking 10-15 years down the road. I dont plan to get rich quick, I plan to build something worth something tangible.
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Again, a full post will be uploaded about this
- Allocation for earnings
I would suggest that we hold off on paying out any Leo dividends until the new year begins. This will give is a few weeks to flex our muscles and build up a nice wallet full of staked LEO's. The start with, we will follow @taskmaster4450's curation trail. He manually upvotes and he is currently LeoFinances top commenter and maybe a top 5-10 earner as well. He has lots of clout within the LeoFinance community and this will be an excellent starting point for us.
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In the beginning, it is very simple. We produce content and curate. All earning's after dividends are paid will be fed into LEO miners and mega miners until we have enough. This might take 2 months, it might take 6 months but increasing our weekly LEO earnings is the foundation of what we are doing here. By the time this time comes round, we will have issued tens of thousands of LBI tokens and we will be ready to look into wLEO. But in the beginning, its a 1-2-3 plan. Earn from curation and posting, buy miners, rinse and repeat. It's boring but it'll work.
Thank you for reading this post and showing an interest in LBI tokens. I hope you now have a little more insight into how this fund will be funded, how will be produce earners and how we will grow the fund after the long term. I understand you might still have alot of questions to ask and things might not make perfect sense but in time as content is released everything will just click together and you'll see the bigger picture. If you have any questions feel free to ask below and i will get back to you as soon as i can.