Leo Finance Assessment: Community driven, Decentralized Foundations, Semi-centralized development and how I see it unfolding

in LeoFinance2 years ago (edited)

I'm currently sitting at 60k Leo Power, in other words, I'm an orca. I would be a whale if some of the team's accounts wouldn't be powered up, diluting the voting influence other users have.

Normally I would speak up about this issue because I am against a team or foundation using their own stake and affecting the influence of their userbase with their community, no matter if it's reward allocation or governance, and I would be even more against this if said accounts are using the community's stake to increment their influence in the ecosystem while reducing the community's influence. The only difference here is that the curation rewards these accounts generate are used to reduce the token inflation. As I understand it, and if I'm wrong please let me know, after all I'm only a two month old account, what is happening is that @leo.voter has to pay their hive delegators a 16% APR, and they pay this in Leo Tokens, which means they have to increase the inflation to preserve the influence @leo.voter has on the Hive reward pool, which is much needed to encourage Hive authors to post using the Leo Finance frontend. The curation rewards from @wrapped-leo, @b-leo and @p-leo lessens the burden the token inflation has to endure, and places that same burden on the back of Leo holders (ultimately someone has to carry this burden, there's no way to evade it). This scheme lowers the curation rewards for every Leo user who has stake in the platform and effectively reduces the token inflation, decreasing the token supply, which going totally by theory means: Staked users do not increase their bags as fast as they could be, but their current stake will grow in value faster. At least that's the theory.

There is only a meager 6% of liquid Leo in the market, whereas 75% is staked in Leo Power and 19% is staked in the ecosystem's Liquidity Pools. This is a healthy scenario, where only 6% of the total supply is ready to be sold, at least in theory. I say in theory because in reality there is a 25% of the total token supply ready to be sold, considering that Liquidity Pools allow any user to unstake at any given moment and sell the tokens. Of course LPs and price action would affect this percentage, and once a whale gets out of the LP, it will affect the position of everyone else, influencing their decision making. In other words, I wouldn't be too worried about this percentage that, despite being big in theory, in practice is not that alarming.

The number that I find more positive, is the 75% Leo tokens staked in the Leo Finance platform. This means that 75% of the stake has invested in Leo Finance with a long term mindset. I'm not a Leo expert and there is still a lot for me to learn, but I do have experience in token valuation, project assessment, market conditions and long term potential. The amount of Leo Power staked makes me bullish, about Leo, both short term and long term, but especially long term. If the Leo Finance team manages to keep up with the expectations and deliver their promises, thus maintaining the interest and investments from the community, this means that once some more adoption happens, the investors who came here early will moon. That is, if the team delivers. There's a long way from the theory promised to the practice fulfilled, and I'm curious to see how this all goes. I'm so curious I invested 3k USD.

One might think, 3k USD is nothing compared to my total portfolio, and in crypto terms 3k is just beer money for one Friday. But in terms of Leo Market Cap and daily volume, 3k USD is so much that it locates me in the top30 in the rich list, which is exactly why I am currently not investing more money, not because I don't have it, but because I think the market share I own is enough in a crypto project that is still in beta mode.

Will I invest more in Leo? Probably, but I need to read more about the project. If you have anything insightful I should read, whether it is positive or negative, please send it my way, I need to asses if I should double, triple or 10x my investment, or if I need to pull out immediately because I missed something or I evaluated the scenario incorrectly.

Why am I so bullish with Leo, then?

I've shown my reservations and doubts, and I've stated why my final assessment is positive, but there is one big reason why I heavily invested in Leo. I wasn't here for any airdrop and I didn't get any genesis stake, I had to buy it all, which makes me an active investor in the project.

When I heard about Leo Finance I opened an account just for the fun of it, but I never really did get in the posting and engaging action, I just left my account there to gather dust. It was only a few weeks ago that I decided to start publishing some stuff here, and after reading a few posts from people that I already have on autovote, and reading even more posts from the team, and researching everything that is there to research in the documentation of the project, I decided to buy Leo. By the way, the docs are not complete, there are many topics that are locked and need updating, in case anyone from the team is reading. If you want more strict investors to put in their money into Leo, you should update the docs and whitepaper etc.

Anyway, the conclusion I got from all the research I did is as follows, and it is basically what you came here to read, it is the real body of the post. That means everything above was just an intro, the longest introduction you will read I guess, and probably the shortest body you will ever read.

Unfolding Leo Finance in the years to come

This is how Leo Finance will moon, if the team does the things right and deliver their promises:

Right now Leo Finance has 600 monthly active users according to @leogrowth. IF their long term plan of bringing this number to 2,500 is fulfilled, and the trend continues, the community will take over the semi-centralized development from the hands of the Leo Finance team. The community will take over doesn't mean that we will kick the current team out, it means that once the community is ready to develop side projects on their own (first we need developers who are staked on Leo), the community is ready to invest in these projects, and the userbase is big and wide enough to make it worthy to develop anything on Leo without being the semi-centralized, respected entity behind the Leo platform.

If the Leo Finance team does things right and grows the community to an amount of users, total value locked, market cap, monthly volume, and has a healthy amount of content creators vs content consumers vs investors, and preserves the healthy percentage of Leo Power staked in the platform, I see the next scenario unfolding:

  • Earning Leo tokens will be harder because of the amount of users.
  • Buying Leo will become more attractive for long term seasoned investors.
  • The price will grow exponentially, giving way to reward allocation to grow in terms of USD.
  • Developers will flock to the Hive Blockchain to build FOR the Leo community because of how attractive it is in terms of niche and monthly users, increasing the intrinsic and concrete value of the platform in terms of usage and usability.
  • This will bring in even more users, making it necessary for them to buy tokens to have influence in the platform and to share a piece of the bullish cake. The price will pump even more, the floor will become even higher, market conditions will affect the token less and less.
    *Projects like Polycub and Cub will be the OG, but these are developed by the central team. This doesn't mean that nobody else can't build on Leo, for Leo users, by Leo users. Community funded, community developed, and community promoted projects will begin appearing. The community will be so big that these projects will be viable and will get support.
  • The community will create a DAO, where there is no head and no tail, only a body of users making decisions for what the majority thinks its best for the platform, effectively taking over the governance, decision making, development and and everything else from the hands of the current team.
  • Leo Finance is now a decentralized monster that can't be stopped and will function without a head and without a tail, it is now it's own boss and will exponentially grow. The founding team's work is done, their baby learned to walk, run, fly and the space travel to the moon.

This is not bad, it might sound like a hostile takeover or that I'm stirring the waters cheering for a decentralized leadership, I'm not, it is just the nature of decentralized driven projects with a semi-centralized leadership. Ultimately, what a semi-centralized team strives for, is overall and general decentralization in terms of development, governance, decision making and pretty much everything else. The purpose of starting a semi-centralized project that aims to be decentralized at some point, is for the team to give way for other entities to take over parts of the project, and to stop being the machine itself to become a cog in a much, much bigger machine that works independently and autonomously.

This is actually very positive in terms of decentralization and what the team wants to achieve long term. If this happens, it will happen in several years, not tomorrow, and it will happen gradually and we will see it unfolding step by step.

IF, and only if these conditions are met, the team behind Leo Finance can go to sleep, if this scenario unfolds it means they succeeded in the ultimate form, the best form, the decentralized form.

I'm not against semi-centralized entities that push a project's growth and development, in fact it is the fastest way to achieve growth. From what I've read, it's not in the team's plans to stay as head and on top of things forever, but until the community is ready and the ecosystem is ready to work as a self sustainable engine that cannot be stopped. In the meantime, the team is more than happy to develop and push the growth from a centralized position, built on top of decentralization, striving for the community's benefit. I am ok with this idea as long as we the community doesn't outgrow the ecosystem and, instead of the community stepping up to share the burden, we rely on this centralized development forever.

In order for this eventual change to happen, the community has to be involved as much as possible and has to speak with their wallet, otherwise Leo Finance will not be able to grow as fast as it can. A semi-centralized development team can only get an ecosystem so far, at one point the community has to step up. The way I see it, we are not there yet and we won't be at least in a few years, but it is bound to happen if, and only if, Leo is to succeed as a massively adopted project.

Posted Using LeoFinance Beta


Pretty interesting and in the end I think kinda of what Khal is hoping plays out.

Posted Using LeoFinance Beta

The game theory surrounding projects like LeoFinance is super interesting.

It's going to take a lot of things going right, but I actually can see the scenario that you propose playing out.

Happy to have you along for the ride :)