UNUS SED LEO LEO
What is UNUS SED LEO?
UNUS SED LEO was launched by iFinex, the parent company of the Bitfinex cryptocurrency exchange and Tetherstablecoin. Bitfinex is one of the world’s largest crypto exchanges; the launch of LEO tokens was presented as a move to boost confidence and gain trust in the company after it faced several legal and financial affairs.
As a subsidiary of the iFinex ecosystem, the crypto exchange Bitfinex provides a wide range of features such as spot and margin crypto trading, peer-to-peer lending, and borrowing.
The name UNUS SED LEO derives from the Latin phrase ‘one, but a lion’. Additionally, it is considered that the name was taken from Aesop's fables - a fox rebukes a lion for having only one child. The company chose this name to express a focus on quality over quantity.
The LEO token was launched via a private sale where approximately 1 billion LEO tokens were sold to investors in exchange for USDT (Tether) raising a total of $1 billion in only ten days.
It serves as a discount and marketplace token for all products of the parent company. LEO provides several benefits to Bitfinex users such as reduced trading fees, various discounts, and access to exclusive services.
Discounts vary based on the token holders’ status, the amount of tokens held in account, and the type of trade conducted on the Bitfinex platform. Any future platforms built under the iFinex banner will provide similar discounts and other features to LEO token holders.
A brief history of UNUS SED LEO
The UNUS SED LEO token was launched back in 2019. The Unus Sed Leo Limited company, released its white paper in May 2019; this British Virgin Islands company as a subsidiary of iFinex was formed for the purpose of issuing LEO tokens. LEO tokens primarily serve as the utility token of the iFinex ecosystem, mainly for products released by Bitfinex.
Before UNUS SED LEO was launched, iFinex faced several challenges. The US prosecutors accused the company of illegally transferring funds to Crypto Capital Corp and trying to conceal a loss of $850 million by covering it with USDT reserves.
The affair left iFinex and Bitfinex in a very bad light and lost the trust of the crypto community. The company decided to resolve the situation and announced the creation of a new token known as the UNUS SED LEO token to cover the broad deficit.
The Bitfinex exchange entered the world of decentralised finance (DeFi) after buying a stake in the decentralised trading platform known as Hodl.
As mentioned above in the text, LEO coins were sold through an initial offering; each LEO token was pegged to 1 USDT for the $1 billion supply during the fundraiser.
Why did iFinex launch UNUS SED LEO tokens?
The iFinex company launched UNUS SED LEO (LEO) tokens on the Ethereum blockchain and EOS blockchain. Therefore, the LEO token was introduced, instead of a single blockchain, on two blockchains where 64% resides on Ethereum and 36% of the token supply seats on the EOS blockchain.
The $1 billion amount shall be compensated back through a token burn mechanism and buyback at a market rate of 27% of the iFinex net profit every month.
To regain the investors’ trust, the company created a special dashboard to lay down full details of the tokens’ buy-back and burn process, along with the current circulating supply status available in real time.
The first phase of the token-burning mechanism included revenue from trading fees while the second phase consisted of revenues from other products. The burn and buy-back mechanism will continue until 100% of the 1 billion tokens get burned.
How does LEO work?
The marketplace and discount token provides fee reductions and deposit fee discounts of up to 25% on Bitfinex and EOSfinex. Withdrawal and deposit fee discounts are accessible to users holding over $50 million worth of LEO tokens, along with other advantages such as saving commissions.
Further, it encompasses a unique feature – dual blockchain compatibility. As LEO tokens are based on Ethereum and EOS blockchains, users receive more flexibility in sending and receiving the tokens. The Bitfinex exchange allows conversions between these two chains to be made with ease.
The dual blockchain feature with smart contracts enables developers to create decentralised applications (Dapps) and integrate the token into a wide array of use cases within the world of decentralised finance.
Benefits of UNUS SED LEO
Apart from the reduction of taker and lending fees on the Bitfinex trading platform and deposit fee discounts, UNUS SED LEO provides other advantages as well.
The availability of the tokens on two blockchains enables investors to enjoy the benefits associated with both chains in relation to sending or receiving LEO tokens. The dual blockchain mechanism attracts investors from both communities.
For example, the EOS blockchain brings to the table faster transactions when compared to Ethereum.
Bitfinex assumes the role of a bridge between the Ethereum and EOS blockchain; this enables the LEO token to be used in both ERC-20 and EOS token standards and converted between the two protocols.
If you want to learn more about token standards, check out this article: 'What are token standards?'.
Finally, the issuing company provides the security of assets through a buy-back option. Tokens are implemented in scalable and secure blockchains which makes it safe to trade UNUS SED LEO tokens. The exchange platform provides an additional level of security as well; token holders mostly have to store LEO tokens on the exchange to receive discounts associated with the asset in question.
Drawbacks of UNUS SED LEO
UNUS SED LEO comes with particular drawbacks as well. Let’s take a look at potential disadvantages.
Inaccurate data risk
It is considered that the dashboard could include inaccurate data. Any potential error in auditing could lead to more trust issues in the company’s business model or tokenomics. Furthermore, any proven inaccuracy could negatively affect LEO token holders and investors waiting for a buy-back.
Damaged reputation
One of UNUS SED LEO’s pain points is the still damaged reputation of iFinex platforms. Following the Bitfinex hack and several speculations of Tether manipulation by the crypto exchange, it is not easy for the crypto community to trust the company again. After all, the affair associated with misuse of USDT reserves affected and angered many Bitfinex users.
Price manipulation
Although the company is buying tokens at the market price, there is still a risk of price manipulation. The risk stems from the fact that the issuing company is constantly buying back tokens to take them out of circulation to maintain a stable price and protect investors as well.
However, the issuing company has a high degree of control over the LEO token and its pricing. Taking into account that it is buying the tokens back, there might not be a potential significant increase or decrease in the token’s price to enable a buyback at a rate close to the fundraising price.
What is the LEO token?
LEO token is a utility token of the Bitfinex exchange. We have already explained how the coin was issued to help the iFinex ecosystem deal with a major legal and financial crisis as well as gain back the investors’ confidence and the trust of the crypto community.
This crypto asset is primarily used by traders. Due to benefits provided to users, traders can save on exchange commission fees and experience additional trading discounts. There are three main levels of savings in total – LEO tokens enable users to save approximately from 5% to 25% on Bitfinex exchange fees.
Tokenomics
The UNUS SED LEO token is associated with an interesting tokenomics structure designed to increase investors’ trust and create a real value for LEO token holders. One of its key features presents the buyback and burn mechanism which uses 27% of consolidated gross revenues from iFinex to purchase tokens and burn them.
The tokenomics include recovered funds from the Bitfinex hacks and Crypto Capital as well as the intentional limiting of the tokens’ lifespan until they are out of circulation.
The circulating supply was designed to cease to exist over time, and the total supply was set at 1 billion tokens.
How to buy LEO tokens?
Similar to other crypto assets, LEO token is available on crypto exchanges. You can look it up on the Bitfinex exchange, OKEx and DragonEX. The token is typically exchanged with popular trading pairs such as USDT, BTC and ETH or less popular pairs such as EOS, USDK and KRW.
If you are a crypto novice, take a look at our guide on buying cryptocurrency: ‘How to buy crypto’.
Is LEO token a good investment?
As the golden rule in crypto and investing in general states – always do your own research and never invest more than you can afford to lose. Investing is frequently associated with risks and it is important to educate yourself.
Even though UNUS SED LEO provides a unique ecosystem associated with dual blockchain mechanisms and benefits provided to LEO holders, potential investors should be aware of the risks posed by this crypto asset. On the other hand, a positive trend of the token attracts crypto traders due to its deflationary aspect.
When it comes to LEO tokens, one of its disadvantages is its inability to serve as a long-term investment. This utility token will someday cease to exist and it may not have a significant price increase to aid the issuing company in buying it back. In other words, it is not a good option for investors looking for long-term investments.