I'm not saying you're wrong, and I like both of those assets myself, but...
How is it an upside that you can convert 50 SURGE to 1 LSTR, when the current price of LSTR is significantly lower than $50?
You are viewing a single comment's thread from:
I'm not saying you're wrong, and I like both of those assets myself, but...
How is it an upside that you can convert 50 SURGE to 1 LSTR, when the current price of LSTR is significantly lower than $50?
I think the issue or legitimate complaint some could make was that the presentations of Surge made it appear that it could always be converted to $1.00.
When the hype train was in full swing, the hype-men never pointed at the fine print. That is under certain conditions, if LeoStrategy is dissolved, then holders nominally have first right to convert Surge.
That conversion process does not exist in any code, or hard baked mechanism. To the best of my knowledge there has been no white paper detailing security procedures, or even wallet holders. To date LeoStrategy is operating on "trust me bro" procedures.
Yikes.
It’s not like an instant swap feature. It’s a conversion right, similar to a convertible note in traditional finance.
50 SURGE = 1 LSTR only makes sense if LSTR trades at or above $50. Until then, SURGE holders simply collect their yield and let the market return the asset to its $1 floor over time due to how amazing the sustainable yield on offer becomes as price goes down.
Exactly what Dane said
Think of the conversion as an out of the money call option. You wouldn’t exercise an OTM call but you do understand that it has extrinsic value: the value that it has is based on the time value (SURGE is perpetual meaning it never expires) and also the dividends associated with holding it. The $1 floor price guarantees that the premium of this OTM option is never less than $1. Though market forces can drive it below $1, market forces can also drive it to theoretically infinite value
Cheers Khal.
I just remember having read somewhere that it was like swapping.
I may remember it wrong or have misunderstood it while reading 😅
!BBH