What to do with our LEO?
This is the question everyone has to ask themselves. Do we sell it? Not a smart move in my opinion but certainly an option.
Do we stake it to use as curation? Certainly an intelligent move.
Or do we put it into one of the pools?
As we can see the options are plentiful. In fact, we are going to have to really start honing in on what we want. There is a lot more coming down the road and we must be prepared.
The Investor's Dilemma
This is a topic that has traveled through the investing world based upon a book by the same name. While there are different circumstances it applies to, the thinking can be applied to Leofinance.
Basically, we are having to decide what we do with our LEO. How do we utilize it for the best return while reducing risk? Also, we need to factor in the opportunity costs, the fact that making one decision negates the returns from another decision.
For example, if the choice is between staking LEO and curating versus putting it into the wLEO liquidity pool, we are dealing with a fairly straightforward analysis. What is the risk of each compared to the return. We can weigh those factors versus each other. Of course, there is a third option here, split the LEO up between the two options. Hence we have another variable to consider.
Yet this is straightforward. Let us look at some other options as they exist presently:
- stake leo/curate
- wLEO LP
- bLEO Kingdom
- swap bLEO for CUB/Stake in Kingdom
Of course, there are a variety of Kingdoms to join, increasing the number of possibilities going forward.
And to make matters worse, we are going to have pLEO and like Thorchain Leo (tLEO?) in the future.
This is enough to make one's head spin.
Naturally, there are different risks with each option and the payout is different. This is something that has to be considered every step of the way. We also have to factor in our experience and knowledge level.
To make matters worse, the situations are fluid. Another example will be the pLEO liquidity pool. When that goes live, how does that affect the bLEO pool? Do people pull out of that one to chase the return of the former, causing the latter's return to skyrocket? Only time will tell on that one but it is in the realm of possibility.
As we can see, this is quite a dilemma.
Adding To The Value Of LEO
Over time, all of this is going to add to the value of LEO. We are seeing a lot of options open up which forces people to make some tough choices.
Here is the present token circulation from the Leofinance.io website.
We see there is just shy of 8.9 million LEO distributed right now. A little more than 5 million is staked. There is 2 million liquid which could end up in the new pools. Or, as stated, some might move from the existing pools into the new ones.
The point is we do not truly have a lot of LEO out there to fill these pools with. Over time, as more things are added, it is going to get tougher to get a hold of LEO. People are going to have to choose what they do with each LEO that enters their wallet.
It should be pointed out this is not a bad thing. In fact, it is exactly what we want to have happen. The development team should keep bringing so many use cases to the table that each of us pulls out our hair (if we have it) trying to figure out what to do. Sadly, some are going to end up like kids in the candy store, wanting everything.
Those with an idea of what their risk tolerance along with the vision for the future are able to do well. The key is to develop a plan that works for you and then stick to it. If staking/curating is your thing, go with that. Most can pull in a fine 8%-10% return along with the overall price appreciation as the platform grows. Couple this with author rewards and the individual will find he or she beats most equity market participants (let alone what the banks provide).
Our focus should always be avoiding large, permanent drawdowns in our capital positions. This can be fatal to our wealth generation. Leofinance appears to be building for the future, ensuring that anything directly related to the token is going to grow over time. We will see pullbacks in price, yet if we step back to look at the chart long-term, we see a continuous trend upward.
Of course, we do not want to be caught on the sidelines with no return for long periods of time either. That is where having LEO in areas where a steady return is provided, even if reduced, can be beneficial. That is part of the appeal to the staking/curating option. While it is not the best return, it does enable a steady flow of LEO into our wallets. Therefore, even if the market is pulling back, we are positioning ourselves better in the future. Liquidity pools can have impermanent loss, something that participants should be mindful of.
Source
This is the dilemma all who are involved with Leofinance are going to have. What do we do with our LEO? What is the best option for us?
Whatever people choose, in the long run, will likely provide a fantastic return. We can rest in the thought that just by having LEO, there are going to be higher prices in the future. While this is not guaranteed, the development is such that expansion cannot help but to take place. Anyone who was around about 9 months ago knows what happens when there is a liquidity squeeze in LEO.
The amount of LEO on the market is not plentiful. We need to keep in mind that the use cases are expanding faster than the inflation. This is something that few consider in the crypto world. While many like to talk about inflation, they do so in a vacuum. The bottom line is token inflation means nothing when there is massive growth. There will come a point, very soon I believe, where we will see the inflation rate is not large enough.
That is how fast things can move. We have at least 2 more LEO use cases coming online in first half of the year. This provides more options for everyone involved. Of course, the key is to have these newer platforms pulling in more people to Leofinance. With new applications, we are going to see many opportunities to gain users.
All of this feeds the same pot. And at the bottom of it all is LEO>
If you found this article informative, please give an upvote and rehive.
gif by @doze
logo by @st8z