Hello to all our LBI holders. Just wanted to put the feelers out on how people would feel about me running an LBI buy back? I can see several reasons to do one and some reasons not to. I am keen to gather feedback, so here is what I'm thinking.

The problem.

The biggest issue I have been turning over in my mind lately is that the price of LBI in the market is so far away from our net asset backing. The market obviously does not value our portfolio at anywhere near it's book price. From chatting with some LBI holders, and the general vibe I'm picking up the main issue is one I've previously identified.

Much of the LEO community won't buy LBI as it has half it's assets in HIVE based projects that many in LEO feel are inferior to LEO
Most of the broader HIVE community don't like LEO and won't buy LBI as a result
There is very little middle ground where our investor base is likely to come from

Without demand for the token, price will inevitably drift lower and lower, as people wishing to sell for whatever reason are met with a market with few buyers.

Solutions

Split the fund. I've floated this previously, but there does not seem to be much support from LBI's long term holders for a split. It would be messy for our liquidity pools, and add complexity in admin to what is in reality basically a hobby project these days. I love running LBI, but the time I put in doesn't match up with the income I get out - in blunt terms. Now I have no desire to stop, LBI is my only remaining crypto I personally hold. But splitting the fund and creating more work isn't appealing.
Restructure - we could essentially "pick a side" and focus mainly on that, either go all in on LEO and sell much of our non-LEO assets, or vice versa. Not really a fan personally of this option either, as some of these positions we hold would be hard to liquidate at fair value, and personally I think the diversity of assets and income sources is a strength for us. But it's an option.
Buy backs. We have a range of assets that we could use to buy back LBI tokens and move the price up closer to its book value. We have 9000 HIVE in power down in the PWR wallet. We have 7500 BEE also still to unstake. Beyond that we could use HBD or some other liquid assets to buy LBI tokens off the market.

The buy back in detail.

LBI does not have a guaranteed buy back offer, unlike tokens like SPI which do offer a buy back at 95% of the book price. Putting something like this in place is a possibility worth considering.
My suggestion for consideration would be to do a one-off or short term buy back, staggered over a period of weeks, with a gradually increasing price.

Currently, LBI's asset value is 1.391 HIVE per LBI, but the pool price is just 0.852. Putting bids on the order book progressively stepped over time to buy at, say 0.9, then next week 0.95 then 1 and so on, stepping up the price each week in a slow, steady process.

The reason to do it gradually would mainly be about access to enough funds to hold the price levels, and the impact on liquidity providers. This is the main concern tbh with a buy back, it would lead to IL for our LP's. Essentially, as we put orders in the market above the pool price, arb bots will immediately fill by buying out of the pools and then selling on the market. This would happen in a matter of seconds, and people with pooled LBI would see their pool positions alter, decreasing the number of LBI tokens they have and increasing the "non LBI" paired asset.

Doing it this way would drive extra volume through the pools, which would mitigate the IL a bit. Also, buying back and burning tokens well below the asset value would benefit all LBI holders, as essentially the buys would be profitable trades for the fund. We would buy LBI at 1 HIVE each for example, and burn them, reducing the supply, and increasing the asset backing per token. Buying and burning the LBI token below its asset backing would push the value per token up. Win.

My first preference of course would be a healthy token price so these funds coming liquid could be put into other income producing investments. However the token price is not healthy currently, and has not been for quite a while. But that is also and opportunity for us to push the asset value per token higher.

At the end of the day, what we do is up to you all as LBI holders. Would us doing a slow, steady buy back and burn be something you would support?

As it progresses, if you have a price per LBI that you would like to exit at, then sell orders in the order book would be the way to go. If a lot of holders wish to exit the position, I can keep unlocking assets to fund continued buy backs. However there will hit a point where it will be highly productive, income generating assets that will need to be used, which is when it starts hurting the funds performance.

I really hate to see the token so far below its true value, and hate the thought of LBI holders feeling trapped in a position they may not want any more. I think a slow, steady, progressive buy back will benefit the fund overall, but I'm very keen to hear from holders your thoughts.

The feedback of our liquidity providers is particularly important, as your holdings would be most impacted. Hopefully you all understand Impermanent Loss and would be aware of what this move would mean for your position.

Thoughts, comments, feedback, concerns and opinions welcome.

Cheers,

JK
Hive account@jk6276 for LBI.

I'm a little late to get here, but just the fact that you are planning and talking (rather than hiding) is confidence inspiring!

And I think people are appreciating it, since the trade volume has already gone from pretty much zero to something a little more viable... and the slow buyback option sounds to me like the most viable approach.

Crypto is a tough row to hoe, no matter what you're doing.

=^..=

I think that your post has already made a difference

1300 HIVE has been used so far to buy LBI, at 0.95 HIVE each. TBH I'm delighted with the engagement on the post, but I think the funds deployed so far is the only thing really changing anything.

Gonna take a lot of HIVE to get us back to asset backed value I think. But I'm happy buying back this far below the asset value as it is profitable for LBI holders.

Since you have all the data - you can check if current or new users acquired more LBI after your post 😉

Whatever you decide is fine with me; it's good to try things and see what happens sometimes. I also like burns. 👊

I would support ascending buy backs. As I near 70 it doesn't look like LBI is going to be the windfall I thought it might be when I bought it at launch many years ago. lol. You have breathed some life into it and I appreciate the work you do to try to make it more profitable. In the end I will support any direction you decide to go and will adjust my stack accordingly.

Thank you sir, and yes I think the hopes and dreams of many of us all those years ago have been dealt a solid reality check.

To be honest, my time horizon now for LBI is 10 years. I'm hitting 50 soon, and it'd be nice if LBI was still going and growing by then.

As always I appreciate your involvement and ongoing support.

Hi,
Thanks for bringing this matter to the community and here are few points I'd like to stress out.

Firstly, I don't think the LBI price at current levels is particularly a bad thing, because I know it's worth more than I pay for it.

Secondly, do you know any services that pay for delegation? Apart from Hive account@leo.voter? Do Hive account@ocd-witness, Hive account@steemauto, Hive account@curangel still do it?

What's third, I'm totally against splitting the fund. I would be more willing to pick a side (Hiveward of course), but with the possibility of keeping some Leo in case it would appreciate in value.

So what's left? Buy backs. I would vote for buybacks at price set below 90% of holdings share. But I would vote against liquidating HBD for this cause - it would bring more value when staked than when used for short-term token price growth (abd if funds are needed, HBD has far bigger demand than SURGE).
I would also suggest you announce a minimum 2 month date of a buyback to let current and new investors to obtain more LBI and close number of orders below 90% current assets' market value. I'm sure when the word gets out, people will react accordingly.

Edit

I've got much of our current HP delegated to Eccency (pays 100% of curation) and Curangel (pays 90% maybe ???)

Between the two we earn around 4 HIVE per day roughly.

Firstly, I don't think the LBI price at current levels is particularly a bad thing, because I know it's worth more than I pay for it.

It's bad if you wanted to sell. (or more importantly had some kind of financial issue where you needed to sell urgently) My goal it to get LBI to a point where people can sell it for fair value, and not have to take a loss if they need to exit for any reason. I hate the idea of people feeling trapped in an investment as they can't sell if need be.

Once the price has been restored, I'm thinking to keep some funds in a buy order at 95% of asset value, and instead of burning, list them back in a sell order at 105%. We'd become a market maker for the token, keeping the range on the order book tight and possibly making some profits in the process.

Thanks as always for the feedback.

Does ecency pay in ecency points or in Hive?
The reason I'm asking is to not sell Hive (from power down), but to power it up again and delegate. The Hive price is far from ideal.

Once the price has been restored, I'm thinking to keep some funds in a buy order at 95% of asset value, and instead of burning, list them back in a sell order at 105%. We'd become a market maker for the token,

That's actually a good idea and in addition, creating a sell order does not mean you can't burn the tokens.

As others have said, do the buyback and burn. Does LBI hold any LBI tokens now? Just wondering if there wouldn't be some logic to holding a piece in reserve. Like burn 80% and hold 20% out of the market. That way it's "locked", but if and when the LEO economy starts rolling and LBI starts moving with it, you could potentially have a piece to either seed a pool or even sell into the market for liquidity. Either way, I'm fine with whatever you decide. I'm just thankful that you are actively monitoring and running this thing.

We don't hold any in reserve. I'm thinking that once the burns are done and the price is pushed up around fair value to keep a buy order in at around 95%, and then put sells for any bought tokens at 105%. Would keep the range much tighter on the order book, and any profits from this market making would be a win for the fund. Not a big fan of "manipulating" the price, but also not a fan of having a token that people can't sell for a fair price.

Cheers mate, as always I appreciate your input.

When there is no demand, why we need liquidity pool.
Let them go, and let fix price in Hive Engine.

The biggest complaint about these types of investment tokens is a lack of liquidity. The pools, and allocating a decent chunk of our income to provide yields for LP's is my attempt to fix this. Having a range of pools gives people options, and generates more volume as various prices change, generating fees for LP's. My goal is to entice more and more LBI tokens into the pools as liquidity providers, so LBI has better liquidity which I think makes it more attractive as an investment.

If we fix the price, the pools become more useful.

I don´t know if you have it, but you can include SURGE or other dividends tokens in the LBI assets and then with the yield execute the buybacks.

!BBH

We hold some SURGE and other Leostrategy tokens, and do a small buyback each week. This would be seperate from that.

It's all going to go to zero if we don't do anything anyway, so I say do the buy back. Shake out the weak hands and let them throw their HIVE somewhere else. As a pretty big LP supplier, I'd probably just let it ride. Can you give some more specific numbers about what impact it might have per 1% supplied or something like that?

Here is a rough calculation for you.

Token A is LEO current Price, Token B is LBI current (in the leo pool today) and future is the asset backed value. I couldn't put exact number of tokens in, but the estimate it gives at the bottom is not far off your pool position size.

At a guess, I'd say your current position would shift to roughly 11,000 LEO and 4,500 LBI in the pool (if we pushed LBI price all the way to book value.

Would you mind doing one for me?

Here you go...

Your position (456 HIVE/582 LBI) in the pool would shift to around 636 HIVE and 453 LBI with a move for LBI from $0.085 to $0.14 - estimate (assuming no change in HIVE price)

Value of position goes from $99 to $127.

These are estimates only, and my calculations could be off.

Ah hell, I waste more than that on a tank of gas when I am not able to make it to Costco. Go ahead and do the buy back! I trust you!

Yeah, without a guaranteed buy back offer like SPI, it makes the market price irrelevant for short term investors.

I like the idea.

Thanks mate, yeah the gap between the market price and book value has been frustrating me for a while. This is the best solution I can come up with. If I had the funds personally, I'd bid it up myself and increase my holdings, but just don't have the fiat to put in.

Thanks for the response mate.

Options 2 and 3 in tandem seem to be the best option. Pick a side and then allow those who disagree with the choice an opportunity to sell back their LBI. Anyone left holding it either didn't pay attention (and that's on them) or is knowingly now along for the ride.

That seems better for the overall longer-term health of the fund. If that means you go all LEO and need to sell off DUO and other tokens to do that, then it is what it is.

I plan on holding regardless, but don't let my one opinion sway you.

!BBH
!PIZZA
!ALIVE

I don't know, some of the HIVE side assets could be a hard sell - who has 50-60 thousand spare HIVE to buy our EDS and DAB positions at fair value?

Personally, I like having the mix of both HIVE and LEO positions in the one fund, but maybe it's just me?

Appreciate you sticking around whichever way we go - but a steady buyback seems to be peoples preferred option so far.

P.S. You'll have to change the graphic for the top 3 stakers in your template for DUO posts - LBI has 3866 DUO now and in third spot. 😉

A sensible move in my opinion. Use the assets to provide buy support and help to push the bid higher.

Also I like the idea of burning the LBI. That helps to reduce the total albeit in line with the decline in asset backing. But it can be effective if the price moves higher (for each holder that is).

I think so too task. Starting the buybacks just above current pool prices, but well below asset backed value, and creeping them up over weeks feels like the best way to be value accretive for holders.

I appreciate your comment and ongoing support.