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The controversial cryptocurrency exchange, Bitfinex, announced its initiative to buy back and burn its in-house token, LEO. The exchange claimed that the UNUS SED LEO Transparency Initiative will allow users to see iFinex, the parent company of Bitfinex, purchase LEO at market rates on an hourly basis, equal to a minimum of 27% of the consolidated revenues of iFinex.
However, Paolo Ardoino, Chief Technology Officer of Bitfinex, answered the question on most users minds, tweeting,
“How Unus Sed $LEO holders and wanna-be holders can check if @bitfinex will use really 27% of its revenues to buy back LEO.”
Ardoino played the ‘devil’s advocate’ and asked users to imagine a scenario where Bitfinex reports a lower volume to buy the token, but they would have to explain this to traders. The CTO added,
“why their trades are not reported in the public feed <- so it would not work”
He further gave an illustration to calm the users’ paranoia, stating,
“- report more (fake) volume but we would commit more money in the process consuming our reserves <- it won’t last”
Giving these two instances, the CTO said that Bitfinex’s buyback mechanism was transparent.
“So in my opinion our buy back mechanisms is super-transparent and protective of LEO holders. That is why I claimed we made an unprecedented move among exchanges. Now our revenues are under everyone’s eyes.”
However, Bitfinex’s recent hiccup with the New York Attorney General’s office, along with the Tether Treasury, caused a major stir and has led to a degree of skepticism among its investors.
As for the token LEO, CoinMarketCap ranked the coin at the thirteenth position, right under Tron [TRX]. The token was valued at $1.85, with a market cap of $1.85 billion. The 24-hour trading volume of the coin was reported to be $3.13 million, as it reported a growth of 0.43% over the day. Over the past seven days, LEO fell by 5.39%, but was rising by 0.16% within the hour.
Link (https://ambcrypto.com/bitfinexs-buyback-mechanism-is-transparent-claims-cto-paolo-ardoino/)