RE: Looking at $LSTR, the Latest LeoFinance Token
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Thank you for the update on the planned use of leverage for $LSTR. (A disclosure of your >$8000 holdings in LEO would have been appreciated for transparency.)
The introduction of leverage certainly adds an interesting dimension to the token’s future mechanics, but it raises more questions than it answers. Frankly, jumping ahead to “what’s the leverage ratio?” feels premature when there are far more foundational aspects of the project that remain unclear.
The fund has stated that all proceeds will be reinvested in $LEO and promised never to unstake their holdings. This raises several critical questions:
- Where will the funds for servicing the loan come from?
- Are the loan terms fixed or variable?
- Who is accepting staked tokens - bound by a promise never to be unstaked - as collateral?
The only mechanism by which such "collateral" could be "liquidated" without violating that promise, that I'm aware of, is through delegation. If that’s the case, does this mean the loan provider is someone within the Hive ecosystem? If so, what are the implications for decentralization and influence within Hive? Are there safeguards to prevent over-leveraging, such as debt-to-asset ratio limits? And what happens to the fund’s operations if $LEO liquidity becomes constrained?
Additionally, if $LSTR is called or needs to service its debt, how can this be accomplished without liquidating $LEO? None of this addresses the more fundamental issue of the lack of a mechanical connection between $LSTR and $LEO. This disconnect remains a central concern for me.
While the mention of leveraging clarifies the fund’s planned direction, it further highlights the contradiction in the advice to simply HODL. Leverage requires active management and careful oversight—concepts that stand at odds with the idea of a passive hold strategy.
Based on the available information, it seems plausible that the loan provider could come from within Hive, potentially benefiting from a large delegation of $LEO. If so, this could serve as a mechanism for consolidating influence—for instance, amplifying someone like Khal’s existing position within Hive to bolster a bullish attitude toward LeoFinance and the $LEO token.
Ultimately, transparency around these mechanics is essential. Ensuring that the fund—and by extension, Hive’s ecosystem—rests on a sustainable and equitable foundation requires clarity, not conflicting promises. Right now, instead of transparency, we’re seeing a series of claims that seem to contradict one another.
Thanks for your reply!
Great questions! Glad you are also doing your reseach properly amd sharing this to others do that aswell!
I am also asking questions to them on inleo (for example with regards to the max supply).Although I am very curious I want to fully understand it before I invest.
My position in $leo is not relevant here right? Plus I frequently blog about this position (including today).
My position in $lstr would be relevant - full disclosure there, I have not yet invested in them. Also still in the process of doing my research!
Thanks for your thoughtful reply and for sharing your perspective! I appreciate your gratitude for my post and questions—it’s great to see others also digging into these topics and sharing their research. Open discussions like this are how we all learn and grow together.
On the topic of disclosures, I understand your point, but I’d gently suggest that bringing relevant information into the conversation can be more productive than requiring others to do their own research to understand the context of who they’re talking to.
In the case of $LSTR, which appears to function as a buyback program for $LEO, a significant position in $LEO is highly relevant to the discussion, as it could influence perspectives or stakes in the outcomes.
I think it’s awesome that you’re actively questioning and researching before investing—it’s a solid approach. Hopefully, with more transparency and discussion, we can all get a clearer picture of how $LSTR is meant to work and what risks and opportunities it presents! Looking forward to hearing more of your thoughts as you continue your research.