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Bitfinex Buy Back Will Be “Super-Transparent”

Bitfinex Buy Back Will Be _Super-Transparent_

One of the world’s most famous — some would say infamous — crypto exchanges, Bitfinex, has now announced that it plans to buy back its own native token, LEO, for gradual burning. What’s more, it will be “super-transparent”.

Buy back and burns are generally what a centralized token project will do to reduce the circulating supply, and therefore, add to the token’s scarcity. This is expected to improve the valuation of the token.

Bitfinex’s UNUS SED LEO Transparency Initiative, it claims, will show users iFinex (the parent company of Bitfinex) and all its LEO purchases at current markets rates. Statistics will be updated every hour to show that buy backs would happen with a minimum of 27% of the consolidated revenues of iFinex.

Users on social media have naturally questioned this move, wondering if the transparency can really be as forthcoming as all that. However, Bitfinex CTO Paolo Ardoino was not afraid to address this burning question, saying on Twitter:

1/3 🦁
Just got this question: how Unus Sed $LEO holders and wanna-be holders can check if @bitfinex will use really 27% of its revenues to buy back LEO.
To play the devil advocate imagine we could:

— Paolo Ardoino (@paoloardoino) June 19, 2019

Ardoino suggests in the next series of Tweets that if Bitfinex were malicious, it could choose to report a lower volume, so that they would need to buy back fewer LEO tokens. But this would need them to explain to traders why their activities are not reported in a public feed. He also said that they could go the opposite direction and report fake volumes, but this would then commit more funds from their reserves to buy back LEO, leading to an unsustainable future.

He ends the personal reflection by saying:

“So in my opinion our buy back mechanisms is super-transparent and protective of LEO holders. That is why I claimed we made an unprecedented move among exchanges. Now our revenues are under everyone’s eyes.”

Does this mean Bitfinex would be the first exchange to make good on its promise to be “super-transparent”? It would be unprecedented for sure, but is super transparency possible for any centralized exchange? Time will tell.


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