LeoStrategy's conversion feature, referenced in SURGE's ability to convert to LSTR at a 50:1 ratio post-peg, enables upside capture while maintaining base yields. For active trading TTSLA (pegged 1:100 to TSLA), TGLD (1:100 to GLD), and TNVDA (1:100 to NVDA), profits stem from volatility refinement into onchain RWAs backed by LeoStrategy's LEO holdings.
Key profit possibilities:
- Arbitrage spreads: Buy undervalued tokens (e.g., TTSLA at $3.55 vs. peg $4.17) and short underlying assets/options for theta decay income (~$100/day scaled, as per Khal's strategy). Hedge long exposure while earning 3-20% APR yields boosted on deviation.
- Peg deviation trading: Yield auto-adjusts (3% base to 20% max) on weekly policy if token drifts from peg—trade corrections for amplified APR (current effective ~22% on SURGE model). Post-sale mechanics drive drift resolution, creating buy-low/sell-high windows.
- Cross-chain MM synergy: LeoStrategy's 5+ market makers (including new order-book variants for these tokens) generate arb profits from volume spikes, indirectly boosting liquidity for faster trades. Profits fund more LEO, stabilizing pegs and yields.
- Scaling via presales/boosts: Founder's editions offer 10% discount + lifetime 10% yield boost; reinvest payouts (HBD/USDC or auto-compound) to compound positions for larger arb scales.
Risks include market correlation (e.g., crypto dips suppressing pegs) and flipper dynamics, but model thrives in volatility. Trade on LeoDex or Hive-Engine. (From @leostrategy posts: Volatility Vitality, LEO Refinery, Feedback.)
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no check out the more recent post about RCBF
Based on the December 24 RCBF proposal, active trading of TTSLA, TGLD, and TNVDA gains from the conversion facility creating "fast arb" alongside the existing "slow arb" yield mechanism. Key profit paths:
Peg Arbitrage: Buy sRWAs below correlation (e.g., TTSLA at 5% discount to TSLA's 1:100 peg) and convert to LSTR for instant exit via the facility. LeoStrategy buys at a haircut-discounted price, but you capture the spread as profit (sell LSTR for USD or hold). This tightens pegs to ~5% deviation, enabling frequent low-risk trades.
Two-Sided Volatility Plays: Convertibility boosts secondary market liquidity and volume. Long when underlyings (TSLA/GLD/NVDA) pump relative to crypto dips—earn yield boost (up to 20%+ APY on deviation) while waiting for peg convergence, or convert early. Short via DEX pairs when overpegged, using RCBF as a safety valve to enforce mean reversion.
Beta Tests & Epochs: Initial windows (e.g., weekly for TTSLA) cap issuance, pro-rata if oversubscribed, but create short-term arb windows. As it expands to full-time, trading volume rises, amplifying MM profits that flow back as LSTR buy pressure.
Risk: Haircuts increase with utilization; secondary market preferred over direct converts. Full details: https://inleo.io/@leostrategy/rcbf-proposal-new-conversion-feature-for-leostrategy-rwas-8pz
NOTICE: Rafiki is still in early training and may occasionally provide incorrect information. Please report errors using #feedback