TTSLA is Tokenized TSLA and represents the first-ever Real-World Asset (RWA) launched by LeoStrategy. I did a series of videos deep diving into TTSLA to explain how it all works based on the LeoStrategy docs and a pitch deck that they put together.
TTSLA may seem like a complex product but it is actually super simple. The main thing to understand is "how is the peg to TSLA's price action maintained?"
While many tokens like USDT for example use a mint/burn framework, TTSLA uses "rate policy" as a framework to encourage the TSLA peg.
When TTSLA isn't trading in lockstep with TSLA, LeoStrategy raises the yield for buying and holding TTSLA. This encourages demand and allows TTSLA to retake its peg.
Every Monday at 0:00 UTC, the rate policy is set for the next 7 days. This rate policy dictates the Daily Yield that TTSLA pays.
By paying daily yield, the volatility of TTSLA relative to the TSLA peg is significantly dampened. This allows it to trade in lockstep with TSLA over long periods of time.
Choosing a rate policy peg is a genius move. The major downside is education complexity. It requires a bit more learning for the average investor to understand how TTSLA works vs something with a mint/burn peg.
The main thing to know is this: if/when TTSLA starts to slowly drift away from TSLA's price, LeoStrategy raises the yield for holding TTSLA so that buyers of TTSLA are more heavily incentivized to purchase TTSLA and therefore drive it back up to its peg. On the reverse side, TTSLA's base yield is 3%. It never goes lower than this. If TTSLA is trading at par with TSLA, then the yield is 3%. It increases as the peg decreases. If it goes over the TSLA peg, then LeoStrategy can expand the market for TTSLA as they see fit in order to maintain the peg + grow TTSLA over time.
TTSLA is a superior asset for long-term TSLA exposure:
- Daily yield (3% - 20% based on the TTSLA:TSLA peg)
- Onchain
- Trades 24/7/365
- Composable with DeFi (LP it for extra yield or take collateralized loans via LeoStrategy's collateralized lending program)
- Over-collateralized by LEO on LeoStrategy's balance sheet
00:00 Introduction to PEG Policy for TTSLA
00:43 Understanding the Baseline APR
00:58 Deviations and Interest Rate Adjustments
03:20 Peg Defense Mode and Staking Incentives
03:53 Lock Rewards and Market Impact
05:18 Maximum Intervention and Yield Opportunities
05:53 Conclusion and Predictions
Posted Using INLEO
promising investment alternative, DYOR first
With regular TTSLA content, soon Hiveans and lions will understand how it works.