Leo Arbitrage

5개월 전

I was thinking wLEO would spike and raise up the value of LEO, but wLEO has so much more liquidity it's LEO on HiveEngine that does the spiking.


Click to enlarge image.

Derivative market determining orderbook

Someone spiked LEO to 1.6 ratio already. Users are looking to buy LEO on the market to wrap it but there isn't enough available. I put my 500 coins at the market for 1.4 in case it spikes again.


One LEO is 0.00043 ETH

That's also 1 ETH to 2325 LEO

Never before has the LEO platform had so much massive liquidity. It will take some time for the community to get used to it, especially with such a crazy yield farm competition. It's much safer to purchase wLEO from Uniswap to avoid slippage. It just has to be a big enough investment to justify the gas costs (estimated $11 today) and exchange fees (0.3%).

If I didn't have a big powerdown coming soon I'd think about buying more wLEO and unwrapping it for the regular market. Big chance these spikes keep happening on the low-liquid market. Then again, there's also the chance yield farming gets very competitive going forward and the volatility will ping pong all over the place.



Liquidity is up from $100k to $117,869 in a matter of hours. $6641 volume in the first 8 hours isn't terrible. $20 in fees has already been generated for the Liquidity Providers. That doesn't even include the bounty.


300k tokens are being airdropped over 3 months. $50,000 of the liquidity pool is not eligible to farm. At this point that leaves $68k left to receive reward at the moment. At this ratio, every dollar of liquidity provided returns 4.6 LEO tokens over 3 months.

Of course we must assume liquidity in the pool will grow because this is such a generous yield farm bounty. This competitive growth in liquidity will reduce the yield in terms of tokens gained, but also increases the token price of LEO against the value of Ethereum.

Eligible pool size (add $50k for total)LEO yield per dollar

So if the pool increased to a size of $1,000,000, you'd only get 0.3 LEO for every dollar you spend... then again if the pool has a million dollars in it (Half Ethereum) then how much is LEO worth at that point? Probably quite a bit.

If we can get Ethereum regulars to yield farm over here the token is gonna blow up pretty fast. That's all I'm gonna say. With only 5M LEO in circulation there aren't going to be a whole lot to go around.

We must also consider powering up.

If the bounty becomes super over-bloated by Ethereum farmers (best case scenario), it will probably be worth it to power up and create inflation or just sell to the Ethereum guys directly while trying to time the peak. No small feat.

As far as yield farming is concerned, if we were to get a few Ethereum miners in the pool (required to get those higher numbers), none of those guys know that LEO has another yield farming system, and that's curation and upvotes. The two yield farms must be compared against each other to see which is more profitable.


So what is it? Where's the line?

The line of profitability between upvoting and yield farming the bounty is pretty easy to calculate. Every 10k coins powered up gives you about a 2 LEO upvote. Ten votes a day for 20 LEO per 10k coins a day. During the 120 day bounty period that's 2400 coins. So what makes more?

10k powered up or 10k LP bounty?

Powered up 10k makes 2400 LEO, that's a ratio of 0.24. Looking above we see that doesn't happen until the Uniswap pool has more than a million dollars in it! Wow...

So it won't be worth it to power up until $1M+ is in the liquidity pool from a farming standpoint. But at this point I think we have to assume that so much hype and FOMO got generated that the volatility will swing the other way at the end of the bounty. Maybe, maybe not. Who knows.

Regular 0.3% exchange fee mining.

With $20.25 already collected for LPs I've already made 34 cents just from providing 1.7% liquidity to this Podunk pool. This doesn't even count the bounty. Hm... a lot of volatile price action would send those fees pretty high. It's possible the yield on the pool is still worth it after the bounty is over. Guess I have more math to do later.


There is no conclusion.
I'm just FOMOing into this wLEO thing.
Don't mind me.
Nothing to see here.


Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!