LSTR has less than 73,000 tokens available now from the initial offering. This raise of permanent capital to buy LEO and stake it as sLEO is going very well. Now that LSTR is trading at an mNav discount (meaning our holdings of LEO are worth more in USD terms than the total value of outstanding LSTR shares), we are starting to look at Phase 2.0.
In this post, we will talk about Phase 2 and what to expect.
Phase 2.0 of LSTR
Phase 1.0 is to sell out the initial offering of LSTR tokens to the market. 100% of the proceeds are used to buy LEO. This LEO is our permanent capital base that is staked to earn USDC yield on the sLEO contract on https://leodex.io.
Phase 2.0 is what happens the day when LSTR sells the last token from the initial offering.
LSTR:LEO Liquidity Pool
After the LSTR token is fully sold out, we will launch an LSTR:LEO liquidity pool. This LP will be treasury-owned which means it will generate some small fee revenue for LSTR which is value-accretive to LSTR share holders.
The price of the pool will be a 1.00 mNav valuation of LSTR. Which means that at current market rates, the LSTR:LEO liquidity pool would be priced at ~$1.22.
Right now, LSTR is for sale for ~$1.05-$1.10 per share. This means buying LSTR right now is an instantaneous profit.
sLEO
This week, LeoStrategy will begin unwrapping our heLEO into native LEO (on Arbitrum) and preparing to stake it. According to the LEO team, the sLEO staking contract is already live and the page and ability for us to stake will go live later today.
LeoStrategy will start staking our LEO ahead of time in the sLEO contract. While USDC rewards do not begin until September 23rd, we want to signal strong health in the staking contract as we believe it will attract new buyers to LEO from the world of cross-chain.
The more unique wallets + LEO staked in sLEO, the more confidence that cross-chainers will see from our ecosystem.
September
In September, sLEO will begin earning USDC yield. We will earn a signifcant % of the USDC yield earned by LeoDex - roughly averaging ~$400 USDC per day (and it's been growing exponentially week over week). Khal estimates ~10-15M LEO will be staked on LeoDex. LeoStrategy already holds over 500k LEO. If LSTR is fully committed, we should own north of 1.5M LEO.
This should guarantee that we earn at least 10% of all LeoDex affiliate revenues (if the total staked is 15M and LSTR stakes 1.5M).
That would be $40 per day (at current earnings rate of LeoDex, which we expect to grow significantly) or ~700 LEO per day that we can buy off the market (at current prices).
- LeoStrategy's LEO holdings generate USDC on LeoDex
- 100% of our USDC earnings buy more LEO
- 100% of the LEO we buy is staked as sLEO to earn more USDC
- 🔂
Phase 2.0 TLDR;
In short, Phase 2.0 will see a liquidity pool allowing for the market to price LSTR. The starting price in this pool will be an instantaneous profit for current buyers of LSTR (based on how LSTR is valued - via mNav).
We will stake all of our LEO to begin earning sLEO USDC rewards on day 1. 100% of the revenue we earn will purchase more LEO each day.
This combined with the other 5+ (and growing) means of generating any revenue possible to purchase more LEO means that the per LEO value of LSTR shares will only continue to rise. As this rises along with the LEO:USD value, LSTR shares will become exponentially more valuable in USD terms. This will allow us to continually raise more capital and create more products to acquire more LEO.
LSTR's objective? Generate accretive value for LSTR holders and buy and permanently hodl as much LEO as possible. The real fun begins once the LSTR initial sale is fully sold out.
How is LSTR Valued?
How is it possible that you can buy 1 LSTR at an instant profit today? Because of the mNav discount and the initial sale price of LSTR being static. LeoStrategy has been purchasing LEO off the market at cheaper-than-current market pricing. We have also already been generating accretive revenue for LSTR shareholders through:
- Blog posts
- Threads
- Curation rewards
- (as of today) Delegating our excess HIVE POWER to @leo.voter to earn LEO
- (starting in September) Staking our LEO as sLEO and earning USDC from LeoDex
- (starting in Phase 2) LSTR:LEO LP Provision
LeoStrategy will always look for autonomous ways to generate accretive value for LSTR common shareholders. In short: we find simple ways to generate revenue and 100% of that revenue purchases more LEO and stakes it. Raising the total LEO value of LSTR.
Every day with 100% certainty, the value of 1 LSTR vs. LEO is higher. As LEO rises in USD price, LSTR will rise exponentially (since we not only participate in the higher USD valuation, but we are always worth more LEO as we earn/buy more LEO).