Protocol Owned LEO (POL)
This concept is one of the most important thing to understand in the Leofinances transition from inflationary tokenomics of Leo 1.0, to Deflationary Tokenomics of Leo 2.0.
Introductory Points of discussion
This marks a significant shift from the token's original inflationary model to a new deflationary one, directly addressing investor concerns about token value dilution caused by daily token production called minting and also called token inflation. Inflation reduces token value, while deflation increases token value.
It's hard to convince investors to buy and hold your token,when you are devaluing it every day.
So the Leofinance team developed Leodex as a source of revenue, which allows the substitution of revenue for inflation.
Now using revenue the protocol buys back Leo to use for token rewards, instead of printing new tokens. And the tokenomics of the token change drastically with this switch.
Token ecomnomy is no longer using token printing as revenue, the protocol uses revenue as revenue and now the protocol is on the same deflationary path as Bitcoin, where token scarcity drives value and the guaranteee of no more then 30 million tokens, like the guarantee of no more then 21 million Bitcoin, becomes the chief value point, upon which the entire value proposition is built.
After all the main premise of bitcoin is that there will only ever be 21 million bitcoin, and in the future token printing will cease.
This makes bitcoin vastly different from fiat currency, which governments print at will and devalue at will, and this becomes one of several driving forces behind causing the price inflation of all consumer products and assets purchased with fiat.
Well Leofinance has stopped token production today now, not in the future.
So the same value proposition for bitcoin, is now shared by Leo token.
Leo token printing was turned off, so no more inflation, and no more value dilution.
Token buy backs were turned on and a the Inleo Social Media Application no longer relies on newly minted tokens for its reward pool.
Instead, author, upvote, and comment rewards now come from the POL Treasury, which is detailed below.
Deep Dive into Leo 2.0 Deflationary Tokenomics
The LEO 2.0 overhaul, which launched on June 25th, marked a complete reversal in the LEO token's economic policy.
Key changes include:
Zero Inflation:
The creation of new LEO tokens has been permanently set to zero.
Capped Supply:
All surplus LEO was burned, capping the total supply at 30 million tokens. The supply can never increase.
System Income Rewards Pool (SIRP):
Inleo's revenue streams are used to buy LEO from the market and distribute them to creators and curators, replacing the inflationary reward system.
How the LeoDex POL Buybacks Work
The Protocol Owned LEO system is designed to create a sustainable, flywheel effect that benefits the entire ecosystem:
Buyback period:
For a 90-day period ending around September 25th, 100% of all LeoDex affiliate revenue is used to buy back LEO tokens.
Multi-chain purchases:
LEO is purchased across four different blockchain pools:
LEO (native Arbitrum pool on Maya Protocol)
bLEO (Binance Smart Chain pool on Pancakeswap)
pLEO (Polygon pool on Sushiswap)
heLEO (Hive Engine pool on Beeswap), which is primarily used for the SIRP.
Cross-chain bridging:
LEO bought from BSC (bLEO) and Polygon (pLEO) is bridged back to its native LEO form on Arbitrum.
Vault address:
All LEO purchased is sent to a public-facing POL vault address on Arbitrum, which can be tracked for full transparency.
The vault's activity can be monitored on Arbiscan at 0x00263920Ece9cf7B4FCB7BA12DD820f747f0e67f.
The Staking and Flywheel Effect
After the 90-day buyback period, the POL system transitions to its permanent phase:
sLEO staking rewards:
Starting around September 25th, 100% of LeoDex affiliate revenue will be paid out as USDC directly to stakers of sLEO on the platform.
POL treasury stake:
The POL vault address will also be a staker of sLEO, earning a proportional share of the daily USDC rewards.
Reinforcing the buyback:
The USDC earned by the POL vault is then used to buy more LEO from the native Arbitrum LEO pool on Maya Protocol.
This new LEO is then staked, increasing the POL vault's share of future USDC rewards.
Permanent buyer:
This creates a permanent, self-sustaining loop where the POL treasury continuously buys LEO, increasing its stake and share of future rewards.
How to Track POL Activity
For full transparency, users can track the POL vault's on-chain activity:
**Arbiscan: **Track the accumulation of native LEO on Arbitrum: https://arbiscan.io/address/0x00263920Ece9cf7B4FCB7BA12DD820f747f0e67f
**BscScan: **View bLEO buybacks on Binance Smart Chain: https://bscscan.com/address/0x00263920Ece9cf7B4FCB7BA12DD820f747f0e67f
Polygonscan: Monitor pLEO buybacks on Polygon: https://polygonscan.com/address/0x00263920Ece9cf7B4FCB7BA12DD820f747f0e67f
An upcoming "/leo" page on LeoDex will also provide a user-friendly dashboard to track the POL vault's balance and activity, including when it claims USDC, buys LEO, and stakes sLEO.
Last Words:
- Initial Impact and Future Outlook: The LEO 2.0 launch has already had a positive effect, with the token trading at roughly double its pre-launch price.
- The token price increased from two cents to 22 cents in a short period of time, and after some profit taking, the price has settled around 12 cents.
- So longterm holders are easily up 500% right now, and investors looking for altcoin investments will surely have Leo token on their radar.
- So share the good news on Twitter or X and other Social Media
The End.
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