LEO Token

The history of the LEO Token (LEO) began in 2019 when iFinex, the parent company of Bitfinex, launched the token through an Initial Exchange Offering (IEO) to raise funds to cover debts. The token was created to incentivize involvement in the Bitfinex exchange and wider community by granting holders various benefits, such as discounts on trading fees, lending fees, and exchange fees on platforms run by iFinex, including Bitfinex, Ethfinex, and EOSfinex.

Launch and Initial Offering

The IEO took place in May 2019, with a private sale followed by a public sale in June. During this period, 1 billion LEO tokens were sold at $1 each, raising a total of $1 billion in just 10 days. The tokens were issued on two blockchains: 660 million ERC-20 tokens on Ethereum and 340 million EOS-based tokens on EOS, allowing for cross-chain conversions.

Background and Motivation

The launch of LEO was prompted by financial difficulties faced by Bitfinex. In 2016, the exchange suffered a hack, losing 119,756 BTC. Additionally, in the summer of 2018, Crypto Capital, which held Bitfinex assets, faced a partial government seizure. To cover these financial shortfalls, iFinex decided to issue the LEO token to raise funds.

Tokenomics and Buyback Mechanism

The LEO token is designed to be gradually removed from circulation through a buyback and burn mechanism. Each month, iFinex and its associates buy back a minimum of 27% of the consolidated gross revenues from the previous month, continually until no tokens remain in commercial circulation. This mechanism aims to create scarcity and potentially increase the token’s value.

Transparency Initiative

To maintain transparency, Bitfinex launched the UNUS SED LEO transparency initiative, providing token holders with insights into the token buyback process, including collected platform fees and continuous LEO burns. This information is displayed on the UNUS SED LEO dashboard.

Future Prospects

The future of LEO is tied to its buyback and burn mechanism. As the tokens are gradually removed from circulation, their scarcity may lead to increased value. However, the exact timeline for the complete removal of LEO tokens is uncertain, and the long-term implications of this process remain to be seen.

The LEO Token (LEO) is a utility token and cryptocurrency that provides various benefits to users on the Bitfinex exchange and other platforms under the iFinex banner. Here's how it works:

Trading Fee Discounts

LEO token holders are entitled to reduced taker and lending fees on the Bitfinex exchange. All tiers of token holders receive a 15% reduction in taker fees for crypto-to-crypto pairs, including crypto-to-stablecoin pairs. Additionally, those holding more than 5,000 USDT equivalent in LEO tokens receive a further 10% reduction in taker fees across all crypto-to-crypto pairs.

Funding Fee Discounts

Peer-to-peer (P2P) financial lenders receive a 0.05% discount on P2P lending fees for every 10,000 USDT held in LEO tokens, capped at 5% when 1 million USDT in LEO is held across the previous month.

Withdrawal and Deposit Fee Discounts

LEO holders can enjoy up to 25% discounts on crypto withdrawal and deposit fees. Users holding more than 50,000,000 USDT worth of LEO tokens in the previous month can withdraw 2,000,000 USD worth of fiat each month without incurring additional fees.

Affiliate Program Multipliers

Affiliate program members receive additional multipliers based on the amount of LEO tokens held. For example, holding more than 500 USDT equivalent in LEO tokens results in a 1.1x multiplier, while holding more than 50,000 USDT equivalent in LEO tokens results in a 1.5x multiplier.

Dual Blockchain Compatibility

LEO tokens are issued on both the Ethereum and EOS blockchains, with 64% on Ethereum and 36% on EOS. This dual protocol approach provides increased flexibility and ease of use for token holders, allowing them to choose the blockchain that best suits their preferences.

Token Buyback and Burn Mechanism

iFinex and its associates buy back an amount of LEO from the market equal to a minimum of 27% of the consolidated gross revenues of iFinex from the previous month. This process continues until no tokens remain in commercial circulation. Additionally, recovered funds from the Bitfinex hack and Crypto Capital are used to repurchase and burn outstanding LEO tokens.

Transparency Initiative

Bitfinex launched the UNUS SED LEO transparency initiative, providing token holders with unique, verifiable insights into the token buyback process. This includes access to insights into all collected platform fees and continuous LEO burns, displayed on the UNUS SED LEO dashboard.

Overall, the LEO token is designed to incentivize involvement in the Bitfinex exchange and wider community by granting holders a host of benefits. Its dual protocol build and token buyback and burn mechanism make it a unique and intriguing project in the crypto space.

The strengths of the LEO Token (LEO) include:

• Discounts on Trading Fees: LEO token holders receive discounts on trading fees, with a 15% reduction for all crypto-to-crypto pairs, including stablecoins. Additional discounts apply for holders with more than 5,000 USDT in LEO, with a further 10% reduction in taker fees.
• Flexibility and Ease of Use: The token is issued on both Ethereum and EOS blockchains, providing users with greater flexibility and ease of use. This dual-protocol approach allows for cross-chain conversions, making it convenient for token holders.
• Withdrawal and Deposit Fee Discounts: LEO holders are entitled to up to 25% discounts on withdrawal and deposit fees. Additionally, holders of more than $50 million worth of LEO tokens can withdraw up to $2 million without incurring additional fees.
• Funding Fee Discounts: Peer-to-peer (P2P) financial lenders receive a 0.05% discount on P2P lending fees for every 10,000 USDT held in LEO tokens, capped at 5% when 1 million USDT in LEO is held.
• Affiliate Program Multipliers: Affiliate program members benefit from additional multipliers based on the amount of LEO tokens held by their members.
• Structured Buyback and Burn: The token is designed to be gradually removed from circulation through a structured buyback and burn mechanism, which can help maintain investor confidence and transparency.

The LEO token, a utility token for the Bitfinex exchange, carries several risks that investors should be aware of:

1. Price Manipulation: The token's buyback and burn mechanism, where iFinex purchases LEO tokens at market rate, can lead to price manipulation. This control over the token's price can affect its value and potentially impact investors.

2. Inaccuracy in Data: There is a risk of inaccuracy in the data updated on the dashboard, which can lead to trust issues in the business model or token economics associated with the token.

3. Withdrawal of Benefits: If the benefits of holding LEO tokens, such as fee discounts, are withdrawn without meeting investors' satisfaction, it can lead to distrust in the token's economics and a decrease in its value.

4. Lack of Long-term Investment Potential: The token is designed to be eventually bought back and burned, which means it will cease to exist. This makes it less attractive for long-term investors seeking significant price increases.

5. Risk of Loss: As with any investment, there is a risk of loss if the token's value decreases. This risk is heightened by the token's unique buyback and burn mechanism.

6. High Risk Analysis: According to InvestorsObserver, LEO has a high risk gauge score, indicating that it is a high-risk investment at the moment. This assessment is based on factors such as the money required to shift its price over a 24-hour period, recent changes in volume and market cap, and other proprietary metrics.

• Anthony Chimdiuto: Editor and author of the guide on UNUS SED LEO (LEO) cryptocurrency.