Category Archives: LEO

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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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Bitfinex Seeks $1 Billion in Exchange Offering

Bitfinex Seeks  Billion in Exchange Offering

Just as initial coin offerings used to whip up a frenzy of interest leading up to the boom in crypto price, initial exchange offerings (IEOs) now seem to be the flavor of the crypto year, as giant exchange Bitfinex is now rumored to be looking to raise up to USD 1 billion in its own IEO.

Founding partner of VC firm Primitive Ventures Dovey Wan is the instigator of this latest rumor, saying that Bitfinex was planning a sale of company-branded crypto tokens and an on-platform IEO. A document purportedly obtained by The Block cites China-based Bitcoin investor and Bitfinex shareholder Zhao Dong as the source. The token, dubbed LEO, will be the one sold to raise capital.

The Block head analyst Larry Cermak Tweeted his findings:

Bitfinex released their IEO white paper to raise $1 billion and The Block has all the details. Summary belowhttps://t.co/34FMFeFLp7

— Larry Cermak (@lawmaster) May 4, 2019

The white paper apparently confirms this news. It is also rumored that Bitfinex will allocate 60% of the placement to private backers, although it is not clear if they will benefit from cheaper prices than retail investors buying the tokens during the IEO.

LEO appears to be a utility token as well as a redeemable asset, much in the vein of Binance Coin (BNB), the native token of the world’s largest crypto exchange by trading volume. LEO will also be bought back each month, and Bitfinex will be doing even more than Binance to burn its tokens, committing 27% of its monthly profits to achieve a higher burn rate. This is expected to make the token even more scarce, thus increasing its value, assuming constant demand for a dwindling supply.

 

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