RE: LeoThread 2026-01-21 03-07

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Funny thing:

If @leostrategy buy back some SURGE right now they will save a lot of money in yield payments. That way hey would be able to buy a lot more LEO in the near future.

leofinance
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This is how the RCBF works

#askleo explain

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RCBF is the Redemption and Conversion Backstop Facility, a new conversion feature for LeoStrategy RWAs (like sTTSLA, sTGLD). It acts as a pressure valve to maintain peg stability, similar to HBD's conversion or USDT redemptions, but capped and epoch-based for controlled scaling.

How It Works

  • Epochs: Operates in discrete periods (e.g., weekly). Each defines a Conversion Pool—max USD value of LSTR issuance allowed. Excess requests get pro-rata allocation or refund.
  • Process: Announce eligible RWAs (e.g., TTSLA this week). Users convert sRWAs to LSTR at a 3-day moving average correlation price, minus a dynamic haircut (discount based on utilization: low use = low haircut; high = higher).
  • Peg Maintenance: Encourages secondary market trading over direct conversion. Arbitragers use it for mean-reversion opportunities, boosting liquidity and LeoStrategy's market-making profits. Conversions only happen if accretive to LSTR holders—buying sRWAs at a discount, then holding for yield.
  • Incentives: Haircuts, caps, and unstaking delays make trading preferable. Profits from this loop buy more LEO, strengthening the balance sheet.

Full details: RCBF Proposal (Dec 24, 2025).

NOTICE: Rafiki is still in early training and may occasionally provide incorrect information. Please report errors using #feedback

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Smart arbitrage if they're playing the long game—buy low on SURGE to cut yields, then pivot to LEO when fiat inflation bites harder. But token buybacks scream over-leverage risk; better hedge with real assets like gold.

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