0. Zhao Tongxie: Big B.com issued coins

Speaking of which, since Bitfinex was involved in the USDT thunderstorm incident, Zhao Dong’s shoes have almost become the official spokesperson of Big B Network. I wonder if B Network will give more PR remuneration on the basis of Zhao Tong’s shareholder dividends?

Just kidding. As the big man who controls the currency in circulation in the currency market, every move of the big B network always affects people's hearts. Since the news that Bitfinex will issue coins came out last week ("coincidentally" was also reported by Zhao Tongxie), more and more information about the B network platform currency has spread, and the rumors reached a peak just a few days ago, and the Internet leaked published a white paper on the B-network platform currency:

Seeing such perverted rumors,"Queen's Spokesperson"Zhao Tongxie couldn't sit still anymore, and immediately came out to refute the rumors:

Documentation:"official"Documentation:

(Chinese Version)

(English version)

Now that the official version has come out, the queen will analyze the various details disclosed and the queen's thoughts on the big B network's coin issuance.

1. Various details about LEO

white paper"white paper"fan"fan"The English version of the compiled brochure clearly states on the first page that this is a "marketing material". Of course, at least these two documents are true anyway.

2. The name of the platform currency is LEO, which comes from Latin"Unus Sed Leo", which means - "there is only one, that is the king" (well, so it is useless to know it, but you can talk about it when you are pretending to be coquettish with others).

3. Bitfinex’s gross profit in the past two years (17 and 18) was 333 million US dollars and 418 million US dollars, and the shareholder dividends were 245 million and 261 million US dollars respectively (well, it’s not very useful to know this, but at least it can make you jealous Take a look at Zhao children's shoes).

4. Bitinex’s frozen USD 850 million came from its partner Global Trading Solutions. At present, it seems that these funds should be funds related to business cash flow, so it needs to issue coins to raise them back;

5. The total amount of LEO is 1 billion, each worth 1 USDT, and a total of 1 billion USDT has been raised;

6. LEO has (repurchase + destruction) attributes, and there are three specific methods:

• Use 27% or more of the previous month's profit to repurchase LEO at the market price every month and destroy it, and continue to repurchase;

• If the frozen USD 850 million is unfrozen, 95% or more of it will be used to repurchase LEO and be destroyed. The repurchase time is 18 months;

• If the bitcoin stolen by Bitfinex in 2016 is recovered, 80% of it will be sold at the market price and used to repurchase and destroy LEO;

7. The usage scenarios of LEO:

• The transaction fee is reduced by 15% during currency transactions;

• If the value of holding LEO exceeds 5,000 USDT for more than one month, the above 15% discount will be reduced by another 10%;

• Enjoy a discount on lending fees when lending on the Bitfinex platform, up to 5% lower (but holding LEO needs to be more than $10,000)

• ...Not to mention all kinds of other things, basically they are all aimed at big dealers...

8. Currently in the private sale stage, only after May 10th if there is any remaining, will enter the public sale stage

2. Some views of the Queen

I. 27% monthly profit repurchase

Judging from the public details, the most attractive thing about LEO is that it will use 27% of the monthly profit to continue to buy back, which is very similar to the company's stock buyback in the secondary market. And this is very similar to dividends. The difference between the two is that dividends are paid directly to you, while repurchases increase stock prices.

For this point, a section of analysis by Weibo user and senior coin speculator AlbertTheKing is very reasonable:

The most important piece of information for this IEO (the issued token will be called LEO) is that BFX will use at least 27% of its monthly profits to repurchase LEO. Friends who know the stock market will know that the company repurchases stocks It is a very common operation (especially in the US stock market). Repurchases are essentially the same as dividends. The difference is that the former will only be reflected in the stock price, and shareholders will not receive cash returns (there is also a difference in taxation, but given the It is estimated that no one cares in the currency circle, so I won’t go into details). Using 27% of the profit to repurchase means that BFX will actually sell 27% of the equity (knock on the blackboard! This is the most critical!).

How much is 27% of the equity BFX going to sell? 1 billion U.S. dollars (actually 1 billion usdt, this article does not seek accuracy, so I will not make a distinction). In other words, BFX’s current valuation for itself is 1 billion / 27% = 3.7 billion US dollars

Based on BFX's 2018 profit of 420 million US dollars, this valuation is price-earnings ratio = 37/4.2 = 8.9 times. 8.9 times the price-earnings ratio considered overestimated or underestimated? This is to compare with the same industry.

Traditional companies similar in nature to BFX are stock exchanges. For example, the world’s largest exchange is Intercontinental Group ICE, whose current price-to-earnings ratio is about 17.5 times; another example is the A-share CITIC Securities, whose current price-to-earnings ratio is about 18 times. In fact, the price-earnings ratio of most exchanges is around 15-20 times, which can be considered as the valuation center of the entire exchange industry.

From this point of view, BFX’s valuation of 9 times the price-earnings ratio for itself is half of the valuation of the traditional exchange industry. In direct comparison, it should be said to be kind.

In addition, regarding the scale and status of Bitfinex in the industry and their annual profit, we can say that LEO’s repurchase ability and funding capacity are at least at the same level as BNB, and the amount of repurchase of BNB is much higher than Binance’s. It can be said that LEO is more attractive than any platform currency currently on the market.

Of course, things are not that simple, AlbertTheKing added a paragraph:

Important update, the promotional materials released by BFX obtained after the publication of this article show that the repurchase of LEO with operating profit is limited to 90% of the amount, and BFX will stop repurchasing when the last 100 million LEO is left! This makes the article below that this IEO is equal to BFX selling 27% of the shares invalid! That is to say, this IEO is not equal to issuing shares, and you will not get permanent equity!

II. $850 million buyback

In addition to the 27% monthly profit repurchase, Bitfinex also guarantees that if the funds investigated by NYAG are unfrozen, at least 95% will be used to repurchase LEO.

In other words, on the basis of 27% monthly profit repurchase, a larger fund will come in at a faster speed to accelerate the repurchase of LEO.

For the arithmetic among them, AlbertTheKing made a very intuitive analysis for everyone:

According to the optimistic scenario, for example, after unfreezing 700-800 million assets, assuming that 700 million US dollars will be used to repurchase LEO in the end, if the repurchase price is consistent with the IEO price (even if it is inconsistent, the benefits of shareholders are roughly similar Yes, so only the simplest case is analyzed), 700 million LEOs will be destroyed, and 300 million LEOs will be left to enjoy the monthly 27% BFX profit dividend. In this case, the price-earnings ratio of LEO becomes (calculated based on 2018 profits) 3/(4.2*27%)=2.6 times. Compared with the 8.9 times the price-earnings ratio calculated above, the price-earnings ratio of LEO is just under optimistic conditions. This is the real attraction of this BFX IEO.

That is to say, LEO has two glittering money-making themes since its birth - 1. High monthly profit repurchase; 2. Large unfreezing fund repurchase, which is a characteristic that no other exchange has.

III. Risk

Of course, there is no free lunch in the world. As good as LEO sounds, there are risks behind it. At present, the Queen believes that it mainly comes from policies and regulations:

1. The risk of the U.S. government blowing up USDT. This time NYAG is eyeing the big B network. On the surface, it seems that the pig teammates are causing trouble, but in the deep end, it is a signal that the US government has begun to actively attack Bitfinex. As a company that has developed an anonymous currency and brought down the US dollar, the behavior of USDT is almost the same as the nature of challenging the sovereignty of the US dollar, and the B network has been fighting against the government, so even if it wins this time, will it lead to further government action in the future? It is very difficult to say that the high energy attack. Once an attack occurs, can the B network break the thigh of the US government? If you can't break it, can LEO survive?

2. One thing we need to know is that Bitfinex has always insisted on compliant operations, which is not like Binance, which "does what I like". Therefore, the issuance of LEO will definitely attract the attention of financial regulators—not just the United States, but every country where Bitfinex has tentacles will pay attention. Once the policy is tightened, will Bitfinex's life be easier?

3. If the 850 million US dollars cannot be returned, then the theme of LEO will lose an arm, and those who bought at the beginning will definitely suffer losses

IV. Final thoughts

The benefits and risks are all finished. In summary, the Queen thinks that LEO is"money sex"The whole is greater than the risk. Generally speaking, Bitfinex is the style of doing things with a lot of money, so every time"borrow money"Will offer very good conditions. The 16-year bitcoin theft incident caused Bitfinex to issue equity, which enabled a group of people to get a long-term meal ticket."forced"Borrowing money, its conditions are indeed better than all the platform currencies currently on the market. It can be seen that the main purpose of the money from Big B Wangrong is not", but", but"emergency"。

Therefore, the queen believes that if you have the ability, LEO still deserves your attention. There is a high probability that this coin will be a hen that lays golden eggs in the currency circle.

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