RE: LeoThread 2025-07-24 09:14

[khaleelkazi]

I just had a thought for how @leostrategy could potentially play a key role in LEO-Collateralized Loans. An official partnership between LeoDex and LeoStrategy

I have a design for how it would work and it would drive revenue into LSTR (from yield on the collateralized loans). 100% of that revenue earned by LSTR would purchase more LEO and increase the fund value

In simple terms:

1. User deposits sLEO as collateral
2. User gets stablecoins, backed by LSTR's fund value
3. When user is done with the loan, they pay back the stablecoin

Throughout the duration of the loan, LeoStrategy earns the sLEO yield from their collateral deposits and buys LEO with it to add to the main fund. This increases the fund's holdings of LEO and the value of LSTR which further secures the total outstanding loan value

I think this could be a killer idea that drives more exogenous capital into LEO purchases. It also helps address the need of instant liquidity without needing to sell your LEO

Thoughts?

Comments

[rainbowdash4l]

My thoughts (1/2)

• Idea of loans is cool!
• I am not a fan of the risk/reward distribution, as the one taking the risk should get the rewards aswell.

[khaleelkazi]

LSTR is the one taking the risk, so it's the one getting the yield

The user is depositing their sLEO and getting the loan (so they are not the party at-risk)

[rainbowdash4l]

My thoughts (2/2)

• In case loan is not repayed, LSTR might need to sell (which they can't)
• This could be offered without LSTR aswell with the same issues - unless $ value loan < $ NPV collateral period.

[khaleelkazi]

If the loan isn't repayed, LSTR has the sLEO

They could either HODL it or sell it. Likely HODL it is the best option and simply earn yield from the sLEO and assimilate it to their stack

Without LSTR, we don't have a "fund" to back the new stablecoin with.

LSTR issues LUSD (stablecoin) backed by the LSTR fund. It is primarily backed by the loans via sLEO collateral but the secondary backstop is that LSTR holds a massive fund value and backstops the loans with this as "Credit" as well

This increases user confidence vs. offering it without LSTR

[rainbowdash4l]

thank you for the clear explaination!

[simplegame]

instant liquidity is huge.
All for that.
But at that point we use LSTR?
Why not launch a new fund with better openness ?

I support it either way.

[khaleelkazi]

I agree, I think it would have a massively positive impact

The reason to use LSTR is that the fund value can backstop the loans (as a secondary measure, the loans are primarily backstopped by the sLEO collateral that is deposited)

By having a fund with actual fund value backing the loans as well, it increases the overall confidence and robustness of the lending protocol IMHO

Also, LSTR is now under my direct guidance. The openness is something I will fix by adding more people to the public board - like myself, Task and others

I think LeoStrategy is the vehicle we need for deep financial applications, like the one I described here

[khaleelkazi]

My thought here is:

1. LSTR will issue a stablecoin called LUSD on Arbitrum
2. We'll add a page to interact with their lending contract on leodex.io/loans
3. You deposit sLEO, get LUSD
4. There's an LP for LUSD-USDT
5. You can sell or pool your LUSD
6. LSTR earns the yield on your sLEO through the duration of your loan (instead of charging interest). 100% of their earned yield buys more LEO for the main fund and bolsters fund value
7. When you pay back the loan, you have to buyback LUSD and burn it through the /loans interface
8. Then you get your sLEO back

This is similar to how DAI works

[simplegame]

absolutely. More products is what we need.

[anderssinho]

This sounds interesting!

[tokenizedsociety]

Looks good