LEO As A Store Of Value
Over time, the purpose of a token can change.
Bitcoin was established as an electronic peer-to-peer transfer of value system. This was the original vision of Satoshi.
As we know, Bitcoin took on different properties over the years. With the influx of Wall Street, we see that speculation is the nature of the game now. Companies have little interest in using Bitcoin for transacting, they have dozens of ways to do that. They do like the fact that the price is likely to keep appreciating over time, making their holdings more valuable.
This is leading many to believe that Bitcoin can be the foundation of an entirely new financial system since it can be the base layer which is collateralized. Thus additional layers will be built upon the value that Bitcoin brings to the table.
While I am not a proponent of there just being one token (coin) operating in this capacity, the concept makes total sense. In fact, one a smaller scale, I see the same thing happening with the LEOfinance token (LEO).
In one of the posted by @leofinance, we were told that a way to think about the LEO token is as a "holding company". It will be the core asset which derives its value from other projects that are built along with it. This integration of "ownership" will enable LEO to grow in value over time.
The challenge with this view is the token has value on its own. It is traded on an open market as well as serving the role of Proof-of-Brain on leofinance.io. This was the original use case of LEO, something that is obviously expanding.
It is this expansion that leads me to believe that we can see LEO adopt the store of value characteristics that Bitcoin is acheiving.
One thing that leads me to this conclusion is the fact that people are acquiring LEO and not willing to sell it. They believe there will be higher prices down the road. This means it does not operate for transactional purposes since most token holders are being conditioned to speculate. This is what took place with Bitcoin.
Not that this is necessarily a bad thing. One of the advantages to cryptocurrency is that another token can always be created to fill in whatever roles are missing. Thus, one token does not have to fulfill all use cases.
That said, when we look at the ever expanding Leo platform, we see many different projects taking shape. Without going into them all, we see a mixture of social media along with DeFi. Who knows what else will be added to the list over the next couple years?
Whatever the development is, we understand that lending and other financial matters will be added to the platform. This could all be backed by the value of LEO, forming the basis of a new economy. From there, we can collateralize the asset for further expansion while also being aided by the Network Effect.
A couple million people on the different aspects of the platform would bring huge value to the overall ecosystem. Plus, all financial necessities could be filled through even more development, creating a financial supermarket.
All this stems from the foundation being laid by the LEO token.
At present, we see a few advantages to LEO. To start, it is a Proof-of-Brain token that is enhancing the distribution. Each month, more people are using Leofinance.io, which is resulting in the token ending up in more hands. This is an advantage and paramount to the decentralization process.
We also see an aggressive inflation rate. This is something that people misunderstand as a negative. Inflation allows for expansion and more people to participate. In this instance, the growth rate of Leo is far exceeding what the inflation rate. That results in the token not only being swallowed up, but also ending up in a liquidity crisis. Even with the numbers we are at now, which overall are low when compared to the potential market, there is not enough LEO out there for all who want it.
This is the ultimate in Network Effects. The feeder system is going to be multi-faceted creating an ever increasing basket of opportunities for those who are involved. The LEO token can be used to finance whatever ventures are required to build upon it. However, the more that is created, the greater the value of the platform as a whole, including the LEO token. It is the ultimate feedback loop.
Each new person, no matter what level they participate, adds to the entire ecosystem. This provides more value to those individual tokens, again feeding into LEO.
In the end, we could see the LEO economy becoming the real thing. This could end up including millions of people as the entities built on top grow and reach further out.
For now, it is just a matter of getting more pieces in place. With the pace of development, we will see this happening over the next 3-5 years. At that point, the value of LEO could be through the roof, serving as the backbone for tens billions of dollars of worth of economic activity.
LEO might be evolving into a store of value token which will be collateralized for an entirely new economy.
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