Can Leo Build Out A Financial Network?

There is a lot going on.

Leo is experiencing a boom in terms of the focus of development. This is a good thing since many of us are invested in it and believe in the future. However, what is the true potential.

Anyone who follows my work knows I believe that Web 3.0 is the merging of social media and finance. This is something that is in alignment with Leo. After all, it was started with the focus upon financial posts. It is now, however, spreading to becoming the "Everything App".

For the moment, there is a lot of attention given to the social media side of things. We even get images such as this.

Certainly, there is nothing wrong with the focus. Having a plethora of social media offerings is vital. This is, after all, what Elon Musk is doing with Twitter. He purchased that entity for $44 billion and some estimate it is worth half of that. Therefore, he is going to have to recoup a lot of money just to break even.

Some bet against Elon. I do not. Hence, the idea of following his model makes a lot of sense to me. The difference is doing it with Web 3.0 instead of building out the most powerful Web 2.0 social media app.

It appears we are on the path to the social media side of things.

Which brings us to the focus of this article: can Leo become a massive financial network?

Twitter In Finance

One of the reasons why Elon Musk is someone to watch in this discussion is because he was part of the PayPal mafia. He is well aware of what it takes to create a digital platform that excels in the financial arena. In fact, he wrote a plan more than 20 years ago outlining the idea of becoming the largest financial institutions in the world.

At the time, his partners simply decline that idea in favor of simply focusing upon payments. It worked out well but Musk never forgot.

Which brings us back to Leo. There is an advantage that I believe resides with Web 3.0. When we step back, the foundation was built upon finance. Blockchain, after all, is a digital ledger. That is what Bitcoin brought to the table with the distributed ledger technology. We have a transaction log that resembles a bank

Hive goes one step further in allowing the storage of text. This means we are ideally suited for social media. Yet, do not overlook the financial foundation.

Another thing we have to factor in is the idea of currency. Musk is relegated to using the same currency as always. This is mostly going to be USD. There is nothing wrong with that but it is not as powerful as what we are dealing with here. We already have a number of currencies we can utilizing.

That means we are positioned not only for payments with the likes of HBD but also more advanced financial services such as lending. Here is where we could see $LEO really become a powerful asset.

Collateralization

I often speak about and write on collateral. This is something crucial for the financial system. Throughout monetary history, collateral was always vital. It came in many different forms over the years and evolved with time.

This era is no difference. The key here is that it is central to any financial system.

So what does the Leo financial network look like?

It is something that will take a lot of work to design. However, in my vision, one of the key components is $LEO. We see a lot of variables being built to feed value to the token. This is something that have to be taken to the next level.

Let us play a little game:

Suppose we end up with 20 million $LEO in the circulating supply. Let us apply a price of $3 to the token. This would mean a market capitalization of $60 million. This would be a nice sum of money. However, keep in mind, this is still a nothing social media platform in terms of what is out there.

Nevertheless, we suddenly have $60 million in asset value. What do we do with it?

This is where most will either say HODL or sell. That is how the masses think. The wealthy, especially those who created the systems we operate under have a third option: use it as collateral.

The idea of taking a loan against an asset scared the daylights out of people until they realize that 90% of all real estate is sold this way. Why do people take out mortgages? The simple answer is because they lack the money to buy a property outright.

We can apply the same premise. Why would we need a mortgage if we could leverage our $LEO for a loan, then use that to buy the house? Under this scenario, we have the tokens as the collateral, not the property.

Of course, this becomes a self feeding proposition. When we look at buy demand, the platform is instilling many different features to increase that. Using revenue generated to buy the token will help to drive up the price.

What we are discussing here affects the sell side. How much is sell demand reduced if we do not have to sell to get money but can collateralize the asset? Talk about HODLing. Why sell when I can extract a fair portion of the value and put it to work?

Hell, if all remains the same, take out a loan on the $LEO, get HBD, sock it into savings, collect 20% APR, and use part of the interest to pay back the loan.

Why would anyone sell under this scenario?

This is the first leg in creating the Leo Financial Network. It is a rather simple concept which we can build upon. In the future, we might discuss more exotic options.

For now, this is simply a way that Leo members have to start thinking.

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