Lets do the Math on the WLEO bounty.

in #hive-167922last month

As the dawning of the new opportunities presented by the WLEO project approach, I thought it would be a good time to run a few numbers.

300,000 LEO bounty.

  • The LEO bounty for adding to the liquidity pool is 300,000 tokens.

  • This will be split over 12 weeks.

  • That means each week will be 25,000 LEO.

  • I have just received confirmation from @khaleelkazi on discord that the $20,000 of official LEO funds are excluded from this bonus.


Some assumptions:

  • Total pool is $100,000
  • Leo price $0.10
  • Eth price at $350
  • Required to add $1,000 personal stake: 5000 LEO and 1.43 ETH

These assumptions would give an individual a 1.25% share of the bounty total.

This works out to be 312.5 LEO per week. - $31.25

If nothing changes over the 12 weeks (unlikely) that equals $375

That gives an annualised yield of 162.5%

This does not include covering GAS costs (an expense that would reduce the yield, or any fees earned in the pool (an income gained)

The other thing to consider is "Impermanent Loss" This is an unkown in the math, and will depend on price moves of WLEO and ETH

What the hell is Impermanent Loss?

The TLDR is that as asset prices move, the value of your share of the pool may move less as it autobalnces your holdings and you miss out on some of the gains. That's my understanding anyway, I'd recomend more research.

Basically, it means that on assets where the price moves are not corelated, you may lose money compared to if you had just held those assets in your wallet. It occurs because the pool structure tries to keep balance, and arbitragers will come in you may miss out on the full gains in value.

This effect is hopefully ofset by swap fees, and will definitely be more than compensated for in my opinion by the bounty program. Something to read up on however for anyone joining in that has not experienced Liquidity Pools before.

There you go, a ballpark figure of 162.5% annualised ROI plus fees earned in the pool, minus Gas and impermanent loss. Not bad. :-)

Please do your own research - this isn't financial advice. It's also based on lots of assumptions listed above, none of which will be entirely accurate. Could be way off.



P.s. I just notices the new interface doesn't auto-spellcheck - If there are typo's above - sorry.

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Required to add $1,000 personal stake: 5000 LEO and 1.43 ETH
Nice return.

Quick question - Is 5000 Leo the minimum balance that you need to add to the Liquidity Pool on Uniswap?

No there is no minimum as such, although the minimum to receive a share of the bounty is $100 value I believe. I just used the above as an example.

Keep in mind with smaller amounts, the Ethereum Gas fees may make it uneconomical to join. An alternative is being run by @spinvest-leo (an account I run) for smaller investors or those that don't want to worry about the technicalities of dealing with ETH personally.

Thanks for asking.

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$100 value on LEO right?
I am planning to take part in the initiative you are managing through your account. But, also want to be clear on how much do I need to invest If I do that on my own.
Thanks for the reply.

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I'm not confident to say for sure if its $100 leo plus $100 eth, or if its $100 combined. @khaleelkazi will probably pop up and let us know. I think $100 total ($50 leo/$50 eth) but not certain.

Thanks for the info anyways. I really like the initiative that you are managing. It is really helpful for small investors to take part in the wLEO launching.

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Yep $100 total -- $50 LEO + $50 ETH would work :)

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Minus the gas fees, so that's about a 5% annual ROI.

But in all seriousness, I get that we're opening up LEO to more volume by swapping with ETH, but it does feel like linking with an inferior token - given that HIVE is instant and fee free!

Going backwards to go forwards.

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Yes we are venturing forwards to a vastly inferior blockchain with higher costs and lower capacity... but smart contracts and lots of crypto. It's as much a marketing move as anything really, go to where the target audience is instead of trying to bring the target audience to you. Subtle difference but worth a shot in my humble opinion.

Oh it's defo worth a shot, just the irony is killing me!

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