Part 3/10:
Leo Strategy acts as the backbone of this ecosystem. It raises capital through initial staking or issuance processes and uses these funds to purchase and stake LEO tokens, which serve as pristine collateral underpinning the entire system. The key idea is that LEO tokens are overcollateralized, providing a buffer and security layer that supports the tokenized Tesla tokens.
Leo Strategy employs a strategic issuance mechanism called ATM (at-the-money) to expand the supply of tokenized Tesla whenever market demand grows, or when trading conditions are favorable. The strategy ensures that new tokens are only issued when specific criteria are met—particularly, when tokenized Tesla trades above its peg, preventing dilution of value for existing token holders.