LBI was the first project set up based on the LEO token economy outside of the core LEO team. Today, we have set up a new liquidity pool on Tribaldex/Beeswap. Pairing our LBI token with LEO, this mark a new effort to build an asset backed, pooled investment token that has the liquidity to be easily tradeable. It also solidifies the link between LEO and LBI, and brings a new use case for the LEO token.
The pool will have rewards added to it, likely next week. These rewards will be funded from our weekly income, with 5% of the total weekly income of the LBI project allocated to LP rewards. The yield will likely not be big, certainly to begin with. However over time this will grow.
The other main part of the plan is that LBI tokens you hold in the pool will still count to your total holdings. This means they will also receive the weekly dividend payout. In effect, you can double dip, by earning the pool rewards, and the weekly dividends.
One question I can foresee coming is why set the pool up as a LEO pair, and not HIVE? LBI is permanently tied to the LEO project. It was our foundation and LEO's success is LBI's success. Pairing our token with LEO was really the only logical course of action. And it is mutually beneficial. LBI is one of the big LEO wallets, and our success is good for LEO.
The LBI/LEO pair adds a new use case for LEO. If the pool grows and becomes successful, with deep liquidity, it becomes a sink for leo tokens. There is just under 200K LBI, and that is currently worth over 600K LEO. If a good portion of those tokens end up in the LP, then that is a significant number of LEO tokens there.
Here is another possibility down the track. We see SPS, and DEC available on LeoDex. If we can build a strong liquidity pool for LBI, then why not LBI on LeoDex? Of course that would be up to the LEO team, but in time it could become a possibility. Of course, first we need to build the liquidity.
The other thing that traders may find interesting is that the LBI asset backed value is published every day in threads. These values are stated in USD, HIVE and LEO. The LP is paired with LEO. The traditional Hive Engine order book is quoted in HIVE. This could open up interesting arbitrage opportunities to trade between the LP and order book to balance out the price between the two. Of course, if the trading volume picks up, this will generate fees that will benefit the liquidity providers in the pool.
The pool is not deep yet. It has only been seeded with a little bit of my personal holdings. LBI itself will not have any funds in the pool, we won't have any protocol owned liquidity. It's up to LBI holders to fill the pool up.
Don't try to trade the pool with any significant size yet.
If you don't know what impermanent loss is, I'd suggest you learn about it.
LBI is 100% asset backed. LEO has an element of speculation involved. Both are tied to the price of HIVE. All of this carries risk.
Rewards won't be big, risks are present, everyone needs to make their own choices. LBI assumes no responsibility for individuals personal choices.
On the plus side - LBI is completely hard capped, no new tokens can come in to circulation. This means the risk of a rug pull is minimized.
I don't normally like to tag people for attention, but am making an exception in this case as attention is exactly what we need.
Hit me up in the comments if you have any questions. Rewards for the pool will be set up on the weekend. I hope to see LBI holders get involved in this new effort to build some solid liquidity for our token.
Cheers,
JK
