Introduction
LeoFinance users who have been onboarded through Metamask are/will be given an opportunity to cash out their earnings directly into ETH. This is or is hoped to be a selling point for LeoFinance for users coming from outside the Hive ecosystem going forward. They wouldn't have to deal with the native token LEO or HIVE at all if they didn't want to. There is a bit of a problem with this approach, however. I will get into that in this post.
Large-scale Onboarding Of Metamask Users Could Result In Hard Selling Pressure On LEO
Suppose the onboarding effort is successful and the number of weekly active users and authors goes up 10x thanks to the onboarding of Metamask users. Let's assume 90% of them will choose to remain in their comfort zone and not take control over their keys and choose to cash out their rewards into ETH. What this means is constant selling pressure on LEO as a large volume of it is constantly being auto-converted into ETH. That would cause the price of LEO to tank.
Send The Rewards Into the wLEO/ETH pool instead
If the Metamask users are given the option to send their rewards into the wLEO/ETH pool instead, choosing this option will automatically make them liquidity providers whose rewards will be supporting the price of LEO instead of being a drag on it. Of course, they could still pull their rewards out of the pool. But that would be an extra hoop to jump. All users should be clearly explained the benefits of letting their rewards stay in the wLEO/ETH pool.
But Wouldn't The Influx Of New Users Be Enough To Support The Price Of LEO?
Not even remotely by itself. The actual bread and butter of this platform are those users who don't have an account at all. Those people are the consumers of the content who visit leofinance.io and click on the ads. Thanks to the buyback and burn program, all of the ad revenue is used to buy LEO off the market and burn it. The problem is that the ad revenue per reader is very low and that the number of visitors to the web front end has to be very large for the buyback and burn program to even begin to counterbalance the potential hard selling pressure from auto-conversions of LEO into ETH. There need to be hundreds if not thousands of readers for every content creator. Curators bear a heavy responsibility for not rewarding shitposts but rewarding well-formatted and SEO-friendly content interesting to the masses instead.
Conclusion
A high token price for LEO is necessary for LeoFinance to be able to attract high-quality content creators who in turn will be able to attract a large number of ad clicking readers. There are very few capable of attracting the masses on LeoFinance or even on Hive at present. (There are some, though. Check out an earlier post of mine made this week.) Another potential source of value for the token is naturally speculation. But if cashing rewards completely out of the system is made too easy, that has potential to destroy the attractiveness of LEO as a speculative investment vehicle. Little things matter because they add up.
The Geyser model, which will reward liquidity providers to the wLEO/ETH pool the better the longer they keep their funds in the pool, is key. The benefits for becoming a liquidity provider should be laid out in clear terms for authors coming from the Ethereum side of the aisle.