What about temporarily not issuing dividends in favour of growth?

Hello, LBIers. I like to get some feedback on this idea and depending on the feedback, we could possibly host a governance vote.

So not gonna run round around the house, the idea is to suspend LBI weekly LEO dividends in favour of using the funds toward growth. A few other things are factoring in as well and are explained below.

I know I coming into this as an uphill struggle because I know people love to get dividends and there are not many ways to passively earn LEO and because it's weekly some people might look forward to it. I understand this but from my POV, dividends have been getting harder and harder to pay out each week as more of our incomes are coming in the form of HP which is unattainable fully for 13 weeks but I still need to get half of the incomes to issue as dividends each week. This is something we could not have factored in, I dont think any of us had foreseen 12-18 months ago that HIVE incomes would make up 65% of all income for LBI when LEO was trading at over 2 HIVE each.

So the situation is simply, LBI is using all its liquid holdings to issue dividends and there is nothing left over for growth. A few weeks back, the accounts liquid balance went minus and I had to convert some defi yields into LEO to get us back on track. This for me is when something has to change because using defi yields to issue dividends is not the plan. We currently have a weekly HIVE power down in place for around what we earn each week and our HP balance has been steady at 11,300 for the past 19 weeks. 10,000 delegated to leo.voter and 1300 on powerdown for 100 per week. We earn roughly 30 HBD a week from content and i convert whatever HIVE i need to top it up to 50, around 40 HIVE at the minute. The remaining 60 HIVE is converted to LEO.

This is from 2 weeks ago, the past earnings report was not a full week's worth of earnings as content uploads were missed.

Income is 2278 LEO with a dividend of 1139 LEO. We directly earned 724.37 LEO so have to find 414.63 from elsewhere. This is today's price works out to 46 HIVE which is 75% of the 60 HIVE got from the powerdown. The last 25 HIVE is converted to 227.8 LEO and shipped to spinvest as the 10% operator fee. This leaves zero for growth. Sure, we are still saving the other 50% each week, mostly into HBD as it's the only thing we're adding to so we grow by $50 per week on HIVE/LeoFinance.

Something I should note is that if no dividends are being issued, no operator fee is paid. This is something I put into the terms when launching LBI. I thought if investors were not getting paid and we were in full growth mode, the operator should not be paid either with the hope of turning down a penny today to earn a $1 next year. I dont write terms and conditions for projects to benefit me are any signal person/group, I write them to be fair for everyone and sometimes a little non-whale friendly. Anyways, its worth noting that no dividends = no operator's fee as im sure about 1 person (me, me) knows that fact unless someone has gone through the terms and conditions post word for word.

What are you currently getting?

Using the earnings shown above which was a good week, 1139 LEO split over 233,000 tokens is a number with alot of zeros but if you owned 1000 LBI, you'd get a payout of 4.88 LEO worth 25 cents. We have 44 wallets holding more than 1000 LBI. 12 holding more than 5000 and 5 holding more than 10,000 LBI. It's equal to a div of 10.7% because im sure a few a wondering what the number is.

I dont think many people would miss these dividends for a short period of time (6-12 months) as individually they are not worth alot of money but collectively worth more to LBI as a form of growth that should yield higer dividends in the future.

From my experience with SPI

SPI's model is pretty simple. To be blunt and quick, we issued tokens for STEEM, powered all the STEEM UP and used it to earn a STEEM income. We converted that earned STEEM into non-STEEM investments such as BTC. SPI is Steem Powered Investments meaning, STEEM powers our investments, we use STEEM earnings to make investments. The idea is investors invest in STEEM and that STEEM is locked up so the token could never drop below 1 STEEM each. Then because we only USE the "interest" earned from STEEM to make investments, the token price could only increase when the valued is in STEEM. (You have no idea how many times i typed HIVE instead of STEEM and had to correct it just now)

SPI invested in early cefi/defi and a few HIVE projects later on. It only started to issue weekly dividends when it no longer relied on its HIVE earnings to accelerate the growth of the fund as non-HIVE holdings growth had overtaken. SPI is now converting a percentage of its defi yields back into HIVE to fund a loyalty program and invest into some HE tokens. Just a note, 50% of SPI is HIVE POWER, everything else including HE tokens and gaming equals 50%. I always make it sound that SPI is not bullish on HIVE but exactly half the total fund is sitting in HIVE POWER. 21% is sitting in stables and 30% is everything else, mostly BTC. No crazy fund allocation and very much bullish on HIVE overall.

I had the same plan for LBI but we've hit alot of bumps in the road and I'll admit the HIVE airdrop was very beneficial to SPI. LEO has been on a rotter since it launched LBI, we dropped massively in both HIVE and $ value. CUB token has not done much better dropping more than 99% and we had limited exposure to polyCUB. CUBlife's preference is related to CUB performance so... Curation rewards are 1/4 of what they used to be, LEO content is about half what it used to be and leo.voter is not paying out 16% anymore. It's amazing that we are still alive to be honest.

There's still time

We can turn it around and the best time to do it now is when we are in a bear market. I believe that the price of LEO will continue to decline, why would it go up? I believe that the price of everything is going to go down, stables would be safe hold and some cryptos will decline more than others. I'd expect the Hive top to bottom % difference to be more than BTC to bottom % because HIVE is a small market cap token compared to BTC and it's more likely to be more volatile meaning it will drop harder than BTC during a bear market but on the flip side, it's moon harder during a bull market.

The crypto markets dont go from bullish, to very bullish and then into a bear market to recover after 1 year to start a new bull run. We still have time to wait and things dont move that fast, we gotta go sideways on a slow decline for a while and then sideways for a year and then we'll start to rally again. Im probably wrong but I was right for SPI. It's just a 4-4.5 year crypto cycle, you can look at charts of BTC and see it. BTC launched in 2009, and all market cycle peaks hit in 2013, 2017 and 2021. I wonder what year is next? This is like a question a teacher asks a 6-year-old in class. If your a little smarter than a 6 year old, you'd figure out the best time to buy back in and start DCAing for the next 2 years is around 1 year later, the start of 2015, 2019 and im guessing the start of 2023 will be a good time to start investing properly. We are a fund? or an LEO curation trail with a CUB wallet?

We need to take advantage over the next 2 years and convert whatever we can into things like BTC and ETH. We are a young fund and we outta take the safe route. Alot of us have lost money from holding LEO due to whatever reasons, many bought in at high prices but we're invested so we gotta make the best we can. Another thing that most people dont factor in when thinking the price of something will increase is inflation. LEO's circulation supply has almost doubled since LBI's launch so for LEO to ever match all-time highs, the market cap would need to be worth at least double what it was before.

This is crypto and with time we can convert an L into a W. It's nice to have hope but why have hope when you can have almost certain results? We follow SPI's model as was the launch plan and if we can replicate half the success, this time in 4 years, we could be sitting pretty. We could build up non-HIVE holdings the same, DCA the same, compound the same until the next bull market and then we're home dry in a boat. Non-HIVE holdings provide instant liquidity giving us better chances to take advantage of opportunities when they pop up and we could also start to offer token buybacks.

Non-hive investments also make an excellent hedge against LEO. If LEO drops another 50%, it's only a cent, it's already dropped more than 100 of those from its all-time high. We'd not be shocked if it were to happen but if BTC were to drop 50% from today and go to under $10k, that would be a shock. Like I said above, small market cap tokens will overshoot higher market cap tokens during bear and bull markets so it would not be unquestionable to think that holding BTC through the bear market might provide a hedge and increase the LBI LEO value overall during a bear market. Of course, during a bull market, the opposite would happen and holding BTC could decrease LBI's LEO value if LEO is increasing faster than BTC.

Anyways, I could on for hours pleading my case. I have never been shy about the fact that I think that dividends were voted in too early but it's come to a head with most of our earnings coming from HIVE and being left with nothing for growth. LBI is more of an income token than a fund in its current state. I could stop saving 50 HBD each week but that's grown to be worth 5% of the fund and has done wonders for us in terms of being a hedge against the declining market. So, i'd like your feedback please or suggestions at ways to increase incomes with no investment.

Please share your thoughts in the comments below

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