As much as it would suffice to do a brief intro on Leo Power up day, how it's an innovation to Leofinance which began a few months ago, and how this month's edition is only a few days away from the time of writing, plus the overall benefit which it has to offer, I'd rather not since everyone/almost everyone on the LEO community already knows what LPUD entails.
If you don't already know, do not hesitate to read the following - Reasons to participate in Leo Power up day, and How to participate in Leo Power up Day
Regardless of my love for Leo Power Up day and how much I'd love to support this community event in my way, I've unfortunately begun to have certain doubts regarding LPUD, and this is something I'd be writing about in a few words.
Scepticism for LPUD
Regardless of how much confidence I have in LPUD, I'm beginning to have doubts regarding LPUD and how the plan to enable the long-term sustainability of the LEO token may work via this event. Though I very well understand that a higher stake means stronger market price especially since it provides for an anti-dump system due to the required 13-week Power down period, during which more LEOs would have been re-staked by others in the LEO community, thus ensuring sustainability.
Unfortunately, since LPUD began in June, there's not been a significant difference in the LEO price unless we intend to count the negative. Before you or whoever reads this begin to explain the concept of the bear and how it has affected the entire crypto market. I'd like to say that I'm very aware of this, and this is another factor to be considered. But in what way? Let's take it one at a time.
The Bear Market's effect
The Bear has affected the price of cryptocurrencies and has resulted in a downtrend, of which Hive and LEO aren't an exception. The only case of exception is that Hive has a better sustainable system than most other cryptocurrencies out there. Some BTC maximalists can testify. This sustainability of Hive means that it was affected by the bear but to a bare minimum as compared to other cryptocurrencies.
Now, the LEO token is a subsidiary of the Hive blockchain, which means that the sustainability and stability of Hive should be reflected in its price and how well it does against the bear market. This means that the price of LEO we see today reflects the strength of its parent currency Hive. But is this strength good enough? Let's relate it to LPUD once more.
The Anti-dump mechanism of LPUD
Participating in LPUD means that our LEO tokens cannot be accessed for another 13 weeks as an anti-dump mechanism, which means that some whales cannot instantly withdraw or sell an amount large enough to disrupt the LEO ecosystem. But does this provide any more advantages apart from that? I don't think so
The purpose of LPUD is to ensure price stability in the absence of the bear but does not necessitate an increase in LEO value/market price in the long run.
With the bear market, LPUD has served a special purpose in terms of LEO's price by not allowing panic-sell amidst the chaos. Apart from this, there's been not much achieved unless you intend to state that the price of LEO would have been far worse than it currently is if LPUD didn't exist. This would mean that LPUD does not protect against the bear but simply reduce its effect. This leads to a simple question that goes to you reading this right now;
Does LPUD make any difference and is it anything more than an anti-dump mechanism?
First published on my read.cash blog