LEO Coin (LEO) is a utility token designed to enhance the Bitfinex community and optimize the platform’s operations on the Bitfinex exchange and other trading platforms managed by iFinex.
What Is LEO Coin?
The UNUS SED LEO (LEO) token, launched in May 2019, surged to the top of the cryptocurrency tokens ranked by market capitalization value. It was compared to Binance Coin (BNB) and reached the top 10 token clubs. In May 2019, iFinex, the parent company of Bitfinex, announced plans to issue no more than 1 billion LEO tokens, pegged to the tether stablecoin. After the sale, Bitfinex enabled trading with the LEO on May 20, trading against BTC, USD, USDt, EOS, and ETH. The tokens were pegged to the tether stablecoin.
What Is LEO Token Used For?
The LEO token aims to make the Bitfinex exchange and EthFinex digital asset trading platform more attractive to its holders. It will support the reduction of taker and lending fees for trading platforms, products, and services offered by iFinex, the Hong Kong-based operator of the Bitfinex exchange and EthFinex digital asset trading platform. LEO holders’ taker fees are expected to be reduced by 15% for all crypto-to-crypto pairs, including crypto-to-stablecoin pairs. Bitfinex has also announced that LEO holders with more than 5,000 USD in LEO will have their taker fees reduced by an additional 10%. Financing lenders will receive a fee discount of 0.05% for every 10,000 USD in LEO tokens in their accounts.
The LEO token team promises that up to 25% of trading fees will be deducted first in LEO, provided that the trader holds these tokens. Traders will be able to buy any fee level in LEO for 30 days, using an amount of LEO equal to 75% of the delta ratio between the average fees generated within one month and the current trader tier in USD. LEO holders will also receive a 25% crypto withdrawal and deposit fee discount, allowing users holding more than 50 million LEO to withdraw USD 2 million without incurring additional fees.
The proceeds from the LEO token initial exchange offering will help organizers improve their business prospects, with funds generated being suitable for general business purposes, strengthening the company’s working capital, covering expenditures, operating expenses, debt repayment, and recapitalization.
How Does LEO Token Economy Function?
LEO token uses token burns to deflate its value, with faster burns compared to Binance Coin. The LEO whitepaper states that token burns occur monthly, with iFinex buying back and burning a minimum of 27% of the consolidated gross revenues from the previous month. The process will continue as long as the tokens are in commercial circulation. In 2018, iFinex’s profits reached USD 404 million. The company plans to repurchase and burn outstanding LEO tokens using funds recovered from Crypto Capital, a Panama-based payment processor company involved in a Bitfinex hack. The repurchases will proceed across multiple transactions, and a similar approach will be used for funds recovered from the Bitfinex hack in 2016. The amount planned for use is equal to 80% of the redeemed funds, with an 18-month period to protect against market spikes.
Leo Coin History
Bitfinex, a Bitcoin-focused exchange established in 2012, is one of the oldest players in the blockchain industry. In May 2019, its core team, which also managed the LEO token project, had over 100 professionals. The company prioritizes quality over quantity, with a headcount of 25. In 2016, Bitfinex was targeted by a security breach, resulting in over $72 million in BTC stolen from customer accounts. In 2019, the exchange was accused of failing to disclose a loss of over $850 million related to Crypto Capital deposits. Bitfinex is currently in a legal battle with the state of New York. In May 2019, Bitfinex and sister company Ethfinex launched their initial exchange offering (IEO) platform, Tokinex, which acts as a guarantor and conducts due diligence checks on its team of professionals.