LeoInfra And wLEO Are Two Sides Of The Same Coin

in LeoFinance •  9 months ago 


https://www.flickr.com/photos/posterboynyc/8127039724/ CC BY 2.0

I think the Metamask integration, the purpose of which is to make onboarding easier by allowing Metamask users to begin using LeoFinance without taking full control over their Hive account, was a great idea. It is absolutely indispensable for the user base of any Tribe to grow. The entire reason for existing of this platforms is to facilitate content creation and engagement. The ultimate goal is traffic, which in turn will drive up the ad revenue thus giving the LEO token value through automated buybacks and burns.

But without wLEO in the picture many Metamask users would be tempted to cash out their earnings into ETH without giving a second thought for the underlying LEO token. This is clearly not optimal, which is where wLEO comes in as it provides the Metamask users a way to yield farm by providing liquidity to the wLEO/ETH pools, thus also creating upward pressure on the price of LEO.

It's up to the founders of LeoFinance to decide how to go forward but what I'm talking about is a point of view that I think would be prudent to take into account. A large number of Metamask users raiding the pool so to speak without any incentive to re-invest their ETH gains back into the system might not bode well for the token price. The traffic, say 10,000, new Metamask users would drive might not be sufficient to offset the selling pressure if a clear majority opts for auto-dumping their LEO earnings to get ETH.

The way to mitigate this arguably good problem would be for stakeholders to go full manual and heavily favor authors who either create exceptionally attractive content or who choose to re-invest their rewards.

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We are planning to re-launch a highly secure and revamped version of wLEO in the next few weeks. Although, it hasn't been officially announced yet :)

I also think many users would still stake LEO either way. There's two sides to the story with ETH users. On one hand, there are definitely users who would just dump their LEO for ETH. On the other hand, there are many potential users who would see the staking rewards and decide that this is a great yield-based platform in terms of LEO POWER.

I agree though - wLEO makes this entire ecosystem way better in terms of liquidity, functionality and connectivity. That's why it is essential to get it back online ASAP but also ensure a great deal of security and redundancy to make another attack like the one we experienced impossible.

Posted Using LeoFinance Beta