The Leo Tokenomics: How We Will Benefit

There is a lot of discussion regarding the LEO tokenomics. This is something that was a long time in the making. What excited me the most is the multi-pronged approach that is being laid out.

We have discussed the flywheel effect and how Amazon has mastered this. It is a concept that any digital platform should seek to replicate.

The tokenomics of Leo seek to mimic this in its own way.

Keep in mind, this is a long term process, so we have to watch for the pillars being established.

It is obviously something that is on the mind of @khaleelkazi. Here is a thread he sent out which referred to liquidity pools and the effect on market capitalization.

https://inleo.io/threads/view/khaleelkazi/re-leothreads-2emecujrr

We can debate the math on this. What is actually important is how there is an effect. Therefore, we have to consider what is in place and will be instilled in the future.

Revenue Streams

Throughout the last year, we have seen the discussion center around developing buy pressure for the Leo token. This is from revenue generation which is then used to buy the token.

So what are some that we are looking at?

Here is some that we are familiar with.

• Leo Premium payments
• Leo Ad Revenue
• Tx Fees From Liquidity Pool on Maya
• Fees For Maya Transactions on Leo UI

Two of these are already in place with the other two slated to go live over the Next month.

What do these four pillars do for Leo?

It is easy to see how the idea is to generate more revenue in each area. These can actually be influenced by the advancement in other areas.

The key is to see how much funding the Leo LP received once it goes live. We are told the Leo team is going to seed it with $100K which is a good start. There are likely going to be other Lions contributing.

Obviously, the deeper the pool, the more activity that can take place. One of the early phases is going to be adapting the Leo wallet so people can swap any token on Hive (or Hive-Engine) to anything on Maya.

This not only generates fees but also results in more page views. Offering a service that can be utilized by the community can make Leo a destination. This appeals to the financial side of the industry, something that we know is where much of the focus is.

Over 70% Staked

The advantage that Leo has is a significant portion of the token is staked. We are looking at more than 70% staked.

This might change as more is learned about the potential incentives within the LP on Maya. Nevertheless, we know liquid $LEO isn't in abundant supply.

When dealing with a value capture token, this can have a huge effect on price. One of the keys with the tokenomics is the fact that the revenues from the Maya fees and Leo premium are used to purchase $LEO and provide permanent liquidity. This means the value is locked in the LPs.

It is hard to say what will happen to the token. It could be purchased out of the LP or sold into it depending up on what the market participants are doing.

The point being is that when there is a tight supply, we are dealing with very little liquid tokens. This was the point of the above thread. If a significant percentage is in the liquidity pool, every dollar worth of purchasing will have an amplified impact.

This is something we will be able to determine after a few weeks. However, here is some simple math:

• total token 20 million (I know higher than what is presently out there)
• 30% not staked = 6 million liquid
• 10% is 600K

How likely is this? Here is where we will have to wait for the response after things go fully live.

At this point, we can start the projections within the transaction fees on Maya. It was mentioned on the last AMA how some are earning over $100K per month on Maya. If we take a percentage of that, say 10%, and look at $10K month in monthly buying, and permanent addition to the LP, that will have a significant impact.

Feeding Other Tentacles

How does this affect other areas of the ecosystem? Even just using the revenue streams above, we could see a big jump.

If Leo is able to be a front end where people can swap ETH for BTC, that would not only generate fees but also Traffic. Even if this doesn't feed into more social media users, it does help to generate ad revenue. Any increase in this ads to the buying of LEO and adding it to the liquidity pool.

As an aside, perhaps one of the most exciting services being developed is Leo AI. Here is another potential revenue generator depending upon how it is structured. We have few details so speculating upon what it is going to look like is pointless at this time. What we do know is that we could have another service to market.

What we are looking at is business building 101.

If all this comes together, we are going to see some buy pressure on LEO. If the price does move up, we will see the LP get deeper, in USD terms (depending upon what the pair does).

All of this is starting to tie together. It is also something that Leo holders should be excited about.

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Posted Using InLeo Alpha