The LEIOS Token: All You Need to Know
True token utility: the holy grail of tokenomics. What can the token actually do? Is it necessary for the platform? Or is it just a representation of the project selling it, providing only speculative value as a token branded by the company that its buyers are hoping one day will be famous? These are not easy questions for people to ask, let alone answer, and many buyers probably don’t want to hear the answers, because after tokens have been purchased in the billions over the last two years — $13.5 billion combining 2017 and 2018 — it is too late to hear any answer but good news.
But in reality, what people desire won’t affect decades of legal precedence related to U.S. and other countries’ security laws. We heard earlier this month that the SEC released a public statement to provide further guidance on the sale of digital assets. Shortly after, they took action against two projects for falsely claiming utility for their token sale. As framed by the TechCrunch article, this is actually good news. The advent of regulations means the advent of acceptance of blockchain within the current financial systems, and a clearer line between good and bad actors in the ICO and cryptocurrency space.
Where does the LEIOS token fit into all of this? Let us define what the token does and explain the measures we have taken to ensure it is issued and utilized in the most compliant manner possible. There are three important points we want everyone to understand about the LEIOS token: its utility within the system, its value to the buyer as a staking token, and the issuance of the tokens with lock-ups for security safe harbors.
The LEIOS Token Utility
The LEIOS token itself is integral to each transaction. It plays multiple roles within the system which are vital for many of the core features of the platform. To define these features, we have to first define atomic swaps. To be unfairly brief, atomic swaps allow for one cryptocurrency to be swapped for another without the need for trusting any third-party. The LEIOS token is based on the code of Komodo, thus inheriting the atomic swap capabilities of the project synonymous with this exciting feature.
The Leios System will facilitate the movement of stablecoin cryptocurrencies between points which can exchange these stablecoins for local fiat. This movement will be done through atomic swaps into and out of the LEIOS token. This allows for each transaction to carry the privacy of the LEIOS token, preventing anyone from just tracing it on a public ledger. However, internal accountability is still possible for the company using the encrypted back-end components of their version of the app.
Atomic swaps also allow for the transaction to start in one stablecoin and end in another. This is especially helpful since each competing stablecoin divides the market of tokenized fiat into different blockchains, but through atomic swaps, the LEIOS token can link them, and hence the exchanges and services that use them, together. For a more detailed explanation of the technical side of the token, our technical paper can be read here.
For the above-mentioned uses, LEIOS tokens need to be available daily to act as a medium of transfer for all transactions in the Leios system. The owners of LEIOS tokens will be able to stake them to be exchanged to and from different stablecoins. As a reward for providing Leios liquidity, stakers will periodically receive a percentage (according to the amount of provided LEIOS tokens) of the transfer fee to their wallets. The total percentage of 0.25% of daily volume will be paid to stakers in regular intervals. Staking is performed from the mobile application according to the following diagram:
This process will allow LEIOS token holders to stake their tokens for as long as they wish, receiving periodic rewards in the form of the stablecoins which they are facilitating the swaps to and from. The staking and the rewards will be published on our website in the spirit of full transparency. This staking will be permanently built into the Leios system, and can only be modified by a 51% vote of approval by Leios stakers. This way, if Leios International introduces an improvement into the staking system that will not harm the stakers, it can be enacted only with their consent.
Security Safe Harbor and Token Lock-Up
The final topic of discussion is an important one — our reasons for the decision, under the guidance of our legal council, to lock tokens for the first three months for non-U.S. purchasers, selling to only accredited U.S. purchasers with a one year lock-up, and requiring all purchasers to provide verification documents as part of our KYC-AML procedure. These measures are all part of Regulation S and Regulation D requirements, as per U.S. security laws. Now, this does not mean in any way that LEIOS is a security token. LEIOS tokens have not been and will not be registered under the securities act of 1933 or any other law or regulation governing the offering, sale or exchange in the U.S. or any other jurisdiction. However, this is done as a safe harbor, so in case any regulatory bodies disagree, it ultimately will not affect the company, the system, or the token negatively, as we took every precaution to ensure we have followed the regulations for issuing a security asset anyway.
Other than this, non-U.S. purchasers have additional lock-ups on top of the ones we are taking for safe harbor reasons. After the initial ninety days, all non-U.S. persons will receive 28% of their total token purchase, and then receive 8% per month for the next nine months, giving everyone their 100% by the end of one year. U.S. accredited persons will receive their full 100% at the end of one year. These additional lock-ups are to ensure a healthy, incremental release of the tokens and to deter speculators. All lock-ups will be managed by our Token Release Schedule, or TRS, contract. This publicly viewable contract will guarantee these releases without any interference.
ERC20 to Mainnet
A final note about the sale is that it will be done with an ERC20 LEIOS token that will be swapped at a 1:1 ratio for the LEIOS mainnet token. We want to be clear that this does not mean there will be a speculatory period where everyone is holding on to dummy tokens waiting for a mainnet release. The mainnet will be developed and tested by the time of the first token release, allowing swaps from the ERC20 placeholder token to the actual LEIOS mainnet token from the first day.
The Sale is Live
The LEIOS token sale has just begun its seed round stage. This is the earliest stage of the sale with the highest bonus offered for our earliest supporters. You can view our seed round document here. This round is 4% of the total sale and is part of our 70% private round, which means the sale can only happen to those we personally speak with and approve for purchase at our discretion. Once we have sold $251,250 of tokens, the seed round will conclude and the private round will run until the launch of our public sale in February 2019. Anyone interested in participating can email our COO, Soheeb Aziz, at email@example.com for more information on our requirements to take part in our seed round.
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