The LEO ecosystem has been growing exponentially. LeoDex volumes are up 10,000%+ over the past 2 months. The LEO Team is focused on building the best DEX Interface on the planet. While we've been running full speed ahead on this mission, a new team has emerged within the LEO Community: LeoStrategy.
LeoStrategy is a separate team that is community-driven from the ground up. Their aim? To be the Microstrategy of the LEO Token.
They are applying a very similar framework as Microstrategy is to Bitcoin but they are applying it to LEO.
Thusfar, they have accumulated over 2M LEO through the launch of their LSTR fund token as well as their sustainable, revenue-generating products like @lstr.voter. They invited me to sit on the board as an advisor a handful of weeks ago and I agreed. Between some ideas I have and their team, we're seeing massive progress and the best part? It requires 0 workload from the LEO Core Team.
This means we now have an external team that is also working with 110% stamina to build value for the LEO Token Economy. Two teams working separately but on the same mission is far better than one.
SURGE
SURGE is really fascinating. Essentially, LeoStrategy took the "STRK" framework from Microstrategy and improved it 10x.
SURGE is a perpetual preferred token. In other words, its a token that has:
- A floor price of $1
- An uncapped upside price
- Dividend APR of ~18% effective yield
- 0 lockups or staking requirements
- Dividends paid weekly
SURGE offers a superior option to yield with downside protection than other assets in the space like HBD staking, stablecoin staking, etc.
The higher yield is one part of this but the even bigger part is the uncapped upside.
How is Uncapped Upside Possible?
This is where the genius of SURGE emerges in my opinion. SURGE has a stable floor price of $1. No matter what, you know that in the long-run, your SURGE tokens are worth at least $1 because of the liquidation preference set by @leostrategy. In the event of a liquidation or token callback, LeoStrategy is obligated to pay SURGE holders first (before LSTR common token shareholders).
SURGE holders sit at the top of the preference stack, so they are fully covered with their $1 per SURGE obligation.
The uncapped upside comes with the conversion option.
This conversion option essentially works like a perpetually dated, out of the money call option.
In layman's terms: you have the right (but not obligation) to convert SURGE to LSTR at any time. The ratio of conversion is 50 SURGE per 1 LSTR.
So why is this an out of the money call option? Because 1 SURGE has an absolute floor price of $1. It wouldn't make sense to convert 50 SURGE for 1 LSTR at the current price because:
- 50 SURGE = $50
- 1 LSTR = $2.50
Thus, you'd lose money by converting the SURGE now. So the call option is considered "out of the money".
How to Get Rich With SURGE
The fascinating part of this is that you get paid to wait for your SURGE call option to be in the money. This can be looked at like a "premium payment" aka a Dividend.
LeoStrategy pays $0.15 in dividends for each 1 SURGE you hold. You get paid these dividends every single week, no matter what. As long as you hold the SURGE, you can expect a dividend payout of $0.15/52 every Monday at 0:00 UTC (you can track the @surge.yield account to see the payouts and also interact with their AI Agent to see stats about SURGE).
So LeoStrategy is paying you $0.15 per SURGE in dividends in perpetuity while you wait for your call option on LSTR common tokens to be "in the money".
SURGE can be considered "In the money" when LSTR hits $50 or higher in price. Why? When LSTR is $50:
- 50 SURGE = $50
- 1 LSTR = $50
So if LSTR then goes to $51, you can convert and make an instant $1 profit ($1.02 per SURGE).
If LSTR goes to $100, you can convert and make an instant $50 profit ($2 per SURGE).
A Lesson in Economics
The economics of how this works and how this is possible can be seen in real-time with Microstrategy. From a more basic standpoint, most will ask "how is any of this possible?"
Probably because it seems too good to be true.
Well, it's not. LeoStrategy is selling you an options contract that is deeply out of the money. You have to HODL this contract (SURGE) until it is in the money in order to convert to LSTR and book some profits.
BUT while you wait, LeoStrategy is paying you a hefty dividend in the form of $0.15 per SURGE. Paid out weekly.
The call option is reflexive which means that in order for the call option to go in the money, LeoStrategy needs to succeed massively. This means that LEO needs to succeed massively (since LEO is the underlying asset on the balance sheet).
Worst case scenario, you hold SURGE for a very long time at a base value of $1 (knowing you can always liquidate for $1 per SURGE in the future) so you have capped downside risk. While you hold, you're getting paid higher dividends than HBD savings and really every other yield product out there.
You hold SURGE with capped downside and earn a dividend hoping that one day LSTR will trade above $50 and you will get to then convert your SURGE for LSTR and book some insane profits - 2x, 3x, 5x, 10x...
The value proposition here is simple:
- Take some profits off the table from your other cryptos that are performing well and put them into SURGE to protect those profits
- Earn a weekly dividend
- Still participate in long-term upside by converting to LSTR at some point in the future for a 2x, 3x, 5x, 10x, etc. profit
Needless to say, I am fascinated by the economics of SURGE. In the past 24 hours, I bought 10,000 and plan to buy a whole lot more.
The presale is limited to 500,000 SURGE and nearly 100,000 of those SURGE are already sold out in just 10 days.
- Buy SURGE -> https://tribaldex.com/trade/SURGE
- Learn about SURGE -> https://inleo.io/@leostrategy/introducing-surge-earn-stable-and-reliable-1667-yield-cdc?referral=leostrategy
- Try the @surge.yield manager on Threads (call it with !surge help to see commands)
Posted Using INLEO
