Recently, I became aware that the Inleo team is planning to strip the inflation from their token LEO, and even more, destroy the mechanism of creating more inflation (I assume it's a smart contract on Hive-Engine and that functionality can have their owner set to null).
Screenshot from Inleo.
That isn't totally a surprise, only the timing. I mean that was the plan all along, but after around 10 years or so, when all tokens would have been in circulation. But I understand the reasons for hurrying these steps.
It's not the first time Khal and his team speak of a mechanism that would take over rewards from an inflationary mechanism, but I think it's the first time when we might see it in practice. Likely, the rewards will be lower at first, but maybe that will be compensated if the price of LEO rises. At this price we can't really say LEO is succeeding, even if they make many progresses with their products.
They've also been suggested to drop inflation by people outside our ecosystem, who said they want to buy and support the token, but don't want to be diluted by inflation.
The process LEO will go through may be important as an example (with its probable headaches too) for something like the future of rewards in Splinterlands, where the SPS inflation will come to an end in a very few years, and maybe even for HIVE, but that's a very complex discussion, which has been started a couple of times in the past without a conclusion so far.
When the inflation will stop (no date is set to my knowledge), rewards will be paid from buybacks. These buybacks are made from funds collected as income. Khal said, that at this point, the income on the Inleo side is very low, but it is compensated with higher fees collected via LeoDex now.
From my understanding, LEO token will change homes, making LEO on the Arbitrum chain the base token, instead of a wrapped token. Inleo, however, is and will remain on Hive. From the end user point of view, things will appear the same.
Khal also gave some details about how rewards would be distributed on LeoDex and on Inleo when this goes live, but I'm afraid you'll have to listen in (or someone who knows please comment), I was too distracted when I listened and it didn't stick to my mind:
I'm sure he will talk a lot more about it as more people find out and questions start to arise to understand what will happen and what they have to do, if anything.
Posted Using INLEO
One thing nobody mentions yet - what will happen to LEOM and LEOMM miners, once inflation stops? Will the mining stops, and miners become 100% worthuseless?
Most likely the miners will earn the same way as curation, when there is a surplus of revenue, a portion will go to the miners. Either that or they will have to set up a program for us to trade in the old megaminers for some new leo token or something.
Here's a question worth asking to Khal! Maybe he hasn't considered that yet, or maybe he already has an answer.
It sounds like quite a lot of things will be changing. I am not sure what will happen if the changes are made. If we can't earn LEO, then is there a point in something like LPUD? Or will the LEO on HE be different from the LEO on the other chain?
From my understanding, we will continue to earn LEO. Not sure exactly what the mechanism will be. Probably not curation, since that is from inflation, which will stop. Probably LPUD will not happen any more, or be repurposed.
It is the first time I heard about the news, hopefully it could make LEO better
It's a big change and we will see how it will be taken by the users and stakeholders, since I assume the news barely started to be noticed yet. On Hive, when such discussions started, there was always a lot of heat.
I always sell the leo I get from curation 🤣 I can't follow all their stuff and sometimes seems a bit chaotic and not intuitive
Well... that's why inflation-based tokens have a hard time appreciating on the long term, especially if they can't outgrow their inflation in terms of new users wanting their tokens.