What is LEO Token (LEO)?
LEO Token is the internal native cryptocurrency of Bitfinex – the world’s oldest crypto exchange. It was launched in May 2019 to raise funds to cover the money that had been confiscated by state authorities. Luckily for Bitfinex, it worked, with the IEO (initial exchange offering) raising US$1 billion.
By using LEO during trading on Bitfinex, users can benefit from fee discounts ranging from 5% to 25% – with the exact amount dependent upon how much LEO is in the client’s account.
Interestingly, LEO Token is unique in that it is designed to have a limited lifespan. At launch, developers promised to gradually buy back and burn all LEO Tokens.
|Did you know?
Bitfinex, the issuer of LEO tokens, is known to have had close connections to Tether, the issuer of USDT – the world’s biggest stablecoin. In 2017 and 2018, Tether loaned Bitfinex hundreds of millions of dollars to cover losses. Bitfinex had repaid the loan, in full, by 2021.
LEO Token (LEO) Basics
Although LEO Token is primarily aimed at traders using the Bitfinex exchange platform, it is supported by many crypto exchanges and can be traded in its own right.
From the outset, LEO tokens were issued on two blockchains; 64% on Ethereum and 36% on EOS. Post-Merge, Ethereum is a proof-of-stake blockchain, while EOS uses a delegated Proof-of-Stake consensus mechanism.
LEO Token Supply
985,239,504 LEO tokens were issued, but due to burning, at the time of writing the circulating supply was 953,954,130 according to Coinbase.
LEO Token Adoption & Usability
As previously mentioned, LEO tokens are primarily used by traders on Bitfinex, who benefit from discounts on trading fees. However, LEO has become a popular digital asset in its own right, and is tradable on exchanges. According to CoinGecko, at the time of writing, LEO was the 21st biggest crypto by market capitalization, at over $3.6B.
LEO Token Network Fees & Speed
The network fees and speed of LEO will depend on which network it is minted on.
Ethereum-based LEO can suffer from the same congestion and volatile gas fees that have long plagued the network. However, post-Merge several further upgrades to Ethereum are planned to address these issues. Fees for Ethereum-based LEO must be paid in ETH.
EOS, while a smaller network than Ethereum, has been dubbed an ‘Ethereum killer’ and is faster and more scalable. A big plus is that there are no transaction fees on the EOSIO blockchain.
LEO Token Security and Safety
As with other Ethereum or EOS-based tokens, LEO benefits from the security of the larger network. However, as always, third parties, like exchanges, are usually the weak links in any crypto ecosystem because they are subject to most hacks. Indeed, Bitfinex itself has been the target of several high-profile hacks over the years.
Because of this, we normally recommended keeping your on-exchange crypto balances to a minimum, and instead using non-custodial wallets. However, in the case of LEO, one of the main reasons for having it is to get trading discounts at Bitfinex, and that requires keeping it on-exchange.
Security and safety tips:
- Don’t leave your LEO on exchange unless you are using it to get trading discounts. Always transfer your crypto to a local wallet for short-term storage.
- For long-term storage, keep your crypto in a hardware wallet.
- Always keep your wallet keys in multiple safe places – they cannot be recovered.
- Never tell anyone about your crypto holdings. No matter how secure your storage is, if you or your loved ones are physically threatened, you’ll probably hand over your personal keys.
LEO Token Volatility
Just like most cryptocurrencies, except stablecoins, LEO has a history of volatility. For example, despite hitting $8.14 on February 8 2022, by November 21 2022, LEO was trading at $3.90 (CoinGecko data). You should also keep in mind that LEO’s value is inextricably linked to Bitfinex’s fortunes. If the exchange were to collapse, for example, the token would probably become worthless.
Final Word on LEO Token
The value proposition of LEO really depends on whether you use Bitfinex, and if you are an active trader. If you do and you are, then there’s no doubt it can be a very useful cryptocurrency to hold. In terms of holding LEO as an investment, the jury is out. On the one hand, its constant burning could lead to upward price pressure over the long term, but on the other, its inherent dependency on the success of Bitfinex, a centralised exchange, makes it vulnerable.