970 million heLEO has been burned. Inflation has been set to 0. The new rewards pool model is LIVE for content creators and curators on INLEO.
A few people clocked this within minutes of the change going live over the past few days. ICYMI, LEO 2.0 was launched on June 25th.
LEO 2.0 carries a number of changes with it. All of these changes are aimed to dramatically improve LEO's tokenomics and create an environment for our ecosystem's token to succeed. Now that LeoDex is a top 10 cross-chain swapping interface (and growing each day with over $2M in monthly trading volume), LEO needs to be positioned to properly capture this value.
For far too long, the LEO token has been using the failed model of an inflationary rewards pool. This model is both a success and a failure:
- It succeeds at fairly and widely distributing a token without any VCs or premines or token sales
- It fails miserably at price appreciation and value capture
We've had 6 years of successfully distributing the LEO token. Now it's time to turn off inflation and capture 100% of the value generated by the LEO Product suite and pump that value into the LEO token.
To do this, we:
- Turned off LEO inflation (yes, there is now 0 inflation on LEO)
- Turned on the SIRP - System Income Rewards Pool
- Focused on LeoDex - our #1 driver of new revenue
- Migrated LEO to be an Arbitrum-native token (heLEO remains as a wrapped version of LEO on Hive Engine and is utilized solely for INLEO)
What Burning 970M LEO Actually Means
When we launched LEO on July 3rd, 2019 we launched it with a max supply of 1 Billion LEO tokens. The actual max supply of LEO was always stated to be 50M tokens. The actual creation of LEO was governed by the inflationary rewards pool. Programmatic inflation controlled the increase in the LEO token supply. The Max Supply figure was more of a necessary mechanic on Hive-Engine. The reality is that LEO was based somewhat off of the HIVE token model. Hive has no max supply cap and is similarly governed by inflation. Inflation dictates new HIVE being added to the market but the max supply is infinity.
With the new changes for LEO 2.0 tokenomics, the max supply is now 30M LEO tokens. No more LEO can ever be minted nor created.
In order to ensure that this is true, we decided to mint and immediately burn the outstanding 970M LEOs to the @null account on Hive. What this does is more symbolic than anything else: it means that if anyone tries to mint more LEO, they physically are unable to.
You can verify onchain that 1B LEO exist today with 30M LEO in circulation and 970M in the @null account. This means that the 970M can never be touched while the 30M can only be reduced (via burns, people losing their keys, etc. more on this later).
30M LEO is now the official max supply and circulating supply of LEO (well, now some LEO has been burned so we are currently sitting at 29,999,636.995 LEO tokens in existence).
The circulating supply of LEO can only ever be LESS than 30M tokens. All LEO has now been fully distributed.
What About INLEO? What About Content Creation/Curation Rewards?
If you've been following these changes, you know the answer to this: SIRP.
System Income Rewards Pool (SIRP) is our new model for content creator/curator rewards on INLEO.
INLEO works identically today to how it did in LEO 1.0. From a user perspective, you create Threads/Blogs and you earn LEO/HIVE/HBD for doing so.
The difference now is that when you earn LEO, it is 100% from buybacks from system income. System income is:
- @leopool's collection of Premium Revenue ($10 HBD per month from 140+ users and growing)
- leo.voter curation rewards (1.8M HP)
- LeoAds
- Creator Subscriptions (a 1% fee on all $5/mo subscriptions to authors on INLEO. a.k.a. OnlyLEOs)
- etc.
As INLEO grows, the system income naturally grows. We grow the userbase, grow the premiums, grow the ad revenue, grow the curation rewards, grow the creator subscriptions, etc. and we see the total system income grow. 100% of system income buys back the LEO token and then distributes it to the SIRP. The SIRP then pays creators/curators every single day based on the total amount in the pool.
If $1,000 per day is generated in System Income, then the SIRP buys $1,000 worth of LEO each day, sends it to @leo.tokens and then it is distributed fairly amongst all curators and creators (based on upvotes and LEO POWER). The same way it did before. The key difference is that this rewards pool is made of buybacks NOT inflation.
You can track these buybacks in two key ways:
- You can ALWAYS view them transparently onchain via the @leopool account's wallet
- You can now see them on Threads with our new @leo.alerts AI Agent. This agent is tracking the @leopool wallet and reporting on the buybacks in REAL TIME directly on Threads (how cool!?)
/@leo.alerts/alert-1752092817?referral=leo.alerts
The flow works like this:
- System Income is earned and sent to @leopool
- @leopool regularly and programmatically buys LEO off the open market every single day
- @leopool sends LEO to the @leo.tokens account, where the SIRP model is running
- @leo.tokens calculates the current daily rewards pool based on the inflows it receives from @leopool each day
- @leo.tokens sends LEO to users each day based on the same 50/50 author/curator split we all know and love
LEO Token Burning
Now that only 30M LEO can ever exist, burning tokens can have a dramatic impact over long timeframes.
A key part of LEO 2.0 is that 100% of Bridging revenue now burns the LEO Token.
For example, a 2% fee is charged (variable 2-5% based on market dynamics) every time someone bridges LEO to another blockchain:
- heLEO
- bLEO
- pLEO
- Native LEO on Arbitrum
Whenever someone wraps/unwraps LEO, a 2-5% fee is charged and 100% of this fee revenue now burns LEO. If 1M LEO is bridged each month at an average fee of 2%, then 20,000 LEO is burned each month.
With a capped supply of 30M tokens, 20k tokens getting burned from exogenous capital will have a dramatic impact on the price in the long-run.
Combine this with other burning methods such as the non-LEO UI tax (when a user creates a post from any other interface than LEO, the LEO rewards are burned), users opting to send some of their rewards to null and other miscellaneous means of burning (i.e. @buildawhale) and you'll see the LEO supply dwindling over long timeframes.
While we don't expect this will have a massive impact overnight, it is a long-term reduction in potential sell pressure as LEO tokens are regularly removed from the circulating supply permanently.
What's Next?
INLEO is in a state where we're just operating the app while focusing on building LeoDex and the 4 products in that arena:
- LeoDex Web App
- LeoMerchants Payments API
- LeoDex Mobile App
- LeoKit SDK
This is the long-term roadmap of LEO.
In the short-term, we're about to release the following:
- QR Code-Only (no wallet needed) swaps on LeoDex for ZEC and other tokens thereafter
- sLEO staking contract - stake LEO on LeoDex (Arbitrum) to earn daily USDC harvests (this USDC comes from LeoDex Affiliate Fees paid to us from THORChain, Maya, ChainFlip, Rango, Relay and other future integrators)
- /leo dashboard page
- Cross-chain bridging (bridge bLEO, pLEO and native LEO on Arbitrum without going through heLEO. Entirely using one-click on LeoDex)
preview of the new /leo staking page on LeoDex that is going to be released this week (placeholder data)