If TTSLA trades < TSLA where does the extra yield come from?
If TSLA 5X or 10X tomorrow and the HE price doesn't follow the balance sheet of leotrategy (which owes future fixed yield to SURGE holders in HBD of 15% in perpetuity and has equity for LSTR holders) will be depleted more rapidly than we would like to fix the pricing issue for TTSLA holders.
I do understand that SURGE has a more senior liquidation preference to TTSLA holders and that's a good thing as a SURGE holder but if you give away our yield to support TTSLA's price then it's depleting some of SURGE's value proposition.
That seems like a big risk to take for SURGE holders relative to the proposed reward from issuing TTSLA.
I don't think suggesting LEO could grow at 100% a year for 10 years is impossible but I think other less optimistic scenarios could be presented to have more balance for other future write ups.
how is the 3% calculated is it based on TSLA stock price equivalent of TTSLA issued in USD *3%/365 per day and the paid accordingly in HBD or USDC?
SURGE yield is never "given away". Please take a second look at the docs above.
The yield is completely separate and this product actually reduces risk for SURGE holders. How is that possible? Because TTSLA delivers more capital and more profits for LeoStrategy which increases our LEO Balance Sheet which over-collateralizes SURGE and also increases the capacity for dividends. While SURGE lives above TTSLA in the preference stack.
TSLA is not a crypto. The likelihood of a 10x tomorrow is small. The likelihood of sustained growth over long periods of time is high. However, LEO will outperform.
TTSLA's average yield will likely end up being ~7%. If you consider that it will pay 3% when price is trading nominally and 10%+ (it will never pay more than 20%)
3% of $100k is $3,000 per year.
7% is $7,000 per year.
20% is $20,000 per year.
The Market Makers on LEO, LSTR and SURGE are already generating north of $9,000+ per month in sustainable profit. TTSLA has a different risk profile and we suspect it will be even more profitable to market make than LSTR and SURGE.
Market Maker profits from TTSLA in one month alone will likely cover 12 months of dividends. That is without any additional income from new issuances, new market makers and old market makers.