RE: Introducing the WLEO Geyser Model, LEO Token Economy Updates and New Simulation Tool

There is an interesting relationship about staking for curation and providing liquidity.

For example, the curators earn roughly 35% of inflation (i.e. other 35% goes to the authors) and 15% goes to the LP. Then curators or long-term LPs have to decide whether to stake or be LPs.

The more staked LEO leaves for LP, the more rewards curators earns proportionally for their staked LEO. For example, there is currently 4.66M LEO is staked for curation.

If we assume 4M LEO are staked and 1M LEO goes for LP, then 4M earns 35% of the inflation and 1M LEO earns 15%. As an example, if daily reward is 5000 LEO, then a whale with 500K LEO will earn 218.75 LEO (500K/4M50000.35) for curation. On the other hand, if the same LEO whale can own 50% of the LPs, then he will earn 375 LEO (0.550000.15), on top of fees of trading.

This is a very simplistic example that shows the dynamism between curation and LPs. If LPs profit looks handsome, then more LEO will be unstaked and go for LP which will increase curator's reward. When LPs become crowded then LEO can left from LP to be staked for better curation reward.

However, big investors such as @onealfa can change the whole dynamics in very substantive way such as buying up 500K LEO from LP and staking up.

The bottom line is that there will be incentive for both curation and LP. Reward for LPs will not diminish curation reward. It will be forth and back, cats and dogs between LPs and curation.

Posted Using LeoFinance ^Beta