Investing Idea: Unus Sed Leo (LEO)

UNUS SED LEO

It appears that every crypto exchange is launching utility tokens to raise funds while providing a number of benefits to token holders and users.

For instance, Huobi offers Huobi Tokens that enable holders to purchase VIP status and get fee discounts. Then, there’s Kucoin Shares (KCS) for KuCoin exchange users. Holders of the token enjoy platform fee discounts as wells as dividends. Lastly, the most valuable utility token of them all is Binance Coin. Holders of the coin issued by the largest crypto exchange by volume receive discounts on trading and withdrawal fees.

Recently, a new utility coin has made a big splash into the world of cryptocurrency trading. UNUS SED LEO is a utility token issued by iFinex, a privately-held financial technology firm. iFinex offers various markets and products to their customers. Some of their most well-known projects include Bitfinex and Ethfinex Trustless.

The unusual name of the cryptocurrency was derived from the company’s motto. The latin phrase Unus Sed Leo came from Aesop’s fable “The Sow and the Lioness.” In the story, the sow touts about having many children and asks the lioness if she had any children. To this the lioness replies, “One, but a lion.”

Therefore, Unus Sed Leo is a reflection of the company’s ethos of quality over quantity. This overarching principle will also be seen in the utility coin’s future value. That’s because the company plans to repurchase and burn all LEO coins until there are no more tokens in commercial circulation.

UNUS SED LEO Value Metrics

  • Current Price: $1.25
  • All-Time High: $2.00
  • All-Time Low: $1.03
  • YTD Performance: +18.49%
  • Market Cap: $1.245 billion
  • Market Cap Ranking: 14th
  • ROI Since Launch: +18.49%
  • Primary Markets: Bitfinex, DragonEX, BW.com, Gate.io, OKEx
LEO all-time chart
LEO all-time chart | Source: CoinMarketCap.com

Investment Case

Based on our analysis, LEO is more than just a utility token. In a way, it is a bond issued by iFinex. The coins that holders own right now will be bought by the company some time in the future. This will create tremendous pressure that will drive the price up. In the meantime, holders enjoy a myriad of benefits if they trade on the platforms of iFinex.

This two-pronged approach ensures that there’s a steady demand for LEO now while the company takes its time to repurchase and burn all coins for commercial circulation. We’ll discuss both below.

UNUS SED LEO Utility

From all the utility coins in circulation, LEO offers the most benefits to its holders. The company provides numerous benefits to holders that the discounts provided by Binance Coin pales in comparison. According to an independent research review of LEO, the initial benefits that are available to LEO owners include:

  • Holders enjoy a considerable reduction in taker fees when trading all crypto-to-crypto pairs as well as crypto-to-fiat pairs.
  • Reduction in the lending fees on Bitfinex.
  • Discounts in withdrawals and deposits of cryptocurrencies and fiat on Bitfinex.
  • Discounts in taker fees when trading derivatives on Bitfinex (coming).

As mentioned, these are only the initial benefits. iFinex is currently working on future projects such as eosfinex, iFinex IEO Platform, and Bitfinex Derivatives. The whitepaper specifically stated that token holders will likely obtain benefits from these future projects.

These advantages are very likely to appeal to the over 1.6 million users of Bitfinex. Unfortunately, that figure was posted in December 2017 and there are no current stats on the number of users on Bitfinex so it is possible that the number has significantly swollen as of today.

In the end, the utility token offers enough benefits to be attractive to the users of the exchange. This should keep the price stable as iFinex repurchases all coins bit by bit.

Repurchase and Burning

Long-term investors should feel very secure about the prospects of their investments because the token issuer plans to buy all coins and burn them all. This creates the ultimate form of scarcity which will virtually guarantee to push the price higher in the future. This is how iFinex proposes to run its buyback program:

Monthly Purchases

The company along with its affiliates will buy LEO from the market on a monthly basis. iFinex will use 27% of its gross revenues to repurchase coins at current market rates. According to the whitepaper, iFinex is generating substantial revenue but their expenses have been minimal.

iFinex income
A look at the books of iFinex | Source: Picolo Research

So far, over 315,400 LEO ($600,000) coins have been burned. If the burn rate continues, we will likely see a steady increase in price as supply gradually dwindles.

Recovered Funds

On top of the monthly buyback program, iFinex also plans to use 95% of the funds recovered from Crypto Capital to repurchase and burn coins within 18 months after recovery. In addition to that, the company also plans to use 80% of the funds recovered from the Bitfinex hack to buy and burn LEO coins within 18 months after recovery.

The Bottom Line

LEO is not just another utility token. It offers a lot of benefits to holders who trade in one of the markets of iFinex. More importantly, iFinex has provided concrete steps on how they plan to eventually buy and burn all tokens in circulation. This two-pronged approach will keep the price stable while the buyback program provides upward pressure.
This is our investment case for UNUS SED LEO (LEO).

Disclaimer: The author does not own UNUS SED LEO.
Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.