LEO Token, also known as UNUS SED LEO, is a utility token and cryptocurrency that gives holders discounts on trading, lending, and exchange fees on the cryptocurrency exchanges run by iFinex, including Bitfinex. ^{[12] [1]}

Overview

The LEO Token, launched by iFinex in 2019, is a utility token designed to support activity within the iFinex ecosystem, particularly on the Bitfinex exchange. It was initially introduced to raise funds and now provides users with tiered fee discounts for trading, lending, and withdrawals. These benefits depend on the amount of LEO held, incentivizing token ownership and engagement with the platform. LEO is issued on Ethereum and EOS blockchains, allowing for broader compatibility and access.

LEO's utility is integrated into iFinex’s infrastructure, enabling users to access various features and privileges across its trading platforms. Fee reductions and discounts are applied automatically based on token holdings, streamlining the user experience and expanding access to platform services. These privileges extend across a wide array of trading and withdrawal options, enhancing value for active participants in the ecosystem.

The underlying system supporting LEO is built on independently operated data centers controlled entirely by iFinex. This avoids reliance on third-party cloud services and allows for greater control over performance and security. This infrastructure supports high throughput and responsive operations, even during market volatility.

Token supply is reduced through a transparent burn mechanism carried out via smart contracts. iFinex conducts regular buybacks of LEO using company revenues and burns the acquired tokens. This process is designed to gradually reduce total supply over time, with all activity recorded on-chain to ensure transparency and traceability. ^{[3] [10]}

History

Launch

iFinex launched the UNUS SED LEO in May 2019 in an Initial Exchange Offering (IEO) for LEO in May (private sale) and in June (public sale), where the token was sold on a 1:1 basis for USDT. ^[2][14]

LEO tokens were initially issued on two blockchains: 660 million ERC-20 tokens on Ethereum and 340 million EOS-based tokens on EOS. The Bitfinex exchange allows for cross-chain conversions. ^[3][8]

The launch of the LEO token came after the alleged partial government seizure of Bitfinex assets, which Crypto Capital held in the Summer of 2018, and the BitFinex Hack in 2016, where hackers stole 119,756 BTC. ^[21]

The name UNUS SED LEO comes from the Latin phrase “Unus Sed Leo”, pulled from the Greek storyteller Aesop’s fable The Sow and the Lioness. Translated as “one, but a lion”, the phrase encapsulates the fable’s moral, which centers on the philosophy of quality over quantity, in that the might and bravery of a single lion cub is greater than an entire sow’s litter. ^[13]

Crypto Capital Seizure

In late summer 2018, Crypto Capital informed Bitfinex that a portion of the funds held in its custody had been seized by government authorities, but claimed the funds would be released soon. However, by the end of the year, Bitfinex became increasingly concerned that Crypto Capital might not return its assets. As a precaution, Bitfinex began negotiating a secured, revolving line of credit through a credit facility. ^[4]

BitFinex Hack

On August 2, 2016, Bitfinex suffered a hack in its system, leading to a loss of 119,756 BTC, worth about $72 million. After a breach was reported, Bitfinex halted Bitcoin withdrawals and trading. Exchange customers, including those whose accounts had not been broken into, had their account balance reduced by 36% and received BFX tokens (debt tokens) in proportion to their losses. The BFX tokens could be used towards company equity or redeemed by Bitfinex.

On the 25th of February 2019, Bitfinex was able to recover 27.7 BTC with the help of the U.S. government. In relation, two Israeli brothers, Eli and Assaf Gigi were arrested for their alleged involvement in the 2016 hack. ^[5][15][18]

An additional 6.5 BTC was recovered on 14th December 2021 in collaboration with Poloniex, a digital token exchange. ^[16][17]

The recovered funds were converted to USD and paid to RRT (Recovery Right Token) Holders. Bitfinex continues to pursue multiple recovery strategies, collaborating with law enforcement and third parties to track and seize stolen bitcoins as soon as they reach any exchange or business.

In February 2022, a New York couple, Ilya Lichtenstein and his wife Heather R. Morgan, were arrested and charged by the U.S. federal authorities for conspiring to launder the stolen funds and defraud the United States. Of the 119,756 BTC stolen from the Bitfinex platform, the U.S. Department of Justice recovered nearly 94,000 BTC (worth approximately $3.6 billion during recovery). In a statement, Deputy Attorney General Lisa Monaco said it was “the department’s largest financial seizure ever". ^{[5][5][11][19][20]}

Following the announcement, Bitfinex stated that it would collaborate with the DOJ to establish its rights to the recovered bitcoin. In line with the UNUS SED LEO white paper, Bitfinex committed to using 80% of the net recovered funds to repurchase and burn LEO tokens within 18 months of receiving the assets. These repurchases may occur via open market transactions or over-the-counter trades, including direct bitcoin-to-LEO exchanges. ^[18]

Tokenomics

Burning

LEO tokens are governed by a structured and ongoing burn mechanism by iFinex and its affiliates. Each month, at least 27% of the company's consolidated gross revenues from the prior month are used to repurchase LEO tokens from the open market at current prices and burn them, continuing this process indefinitely until no tokens remain in circulation. LEO tokens used to pay fees may also be burned, though revenues from Ethfinex and its associated products are excluded due to the separate NEC token allocation.

Beyond regular monthly burns, iFinex has committed to additional burn events to recover lost or seized funds. If funds are recovered from Crypto Capital, 95% of the net recovered amount, after deducting legal, operational, and related costs, will be used to repurchase and burn LEO, with completion required within 18 months using a volume-weighted average price (VWAP) approach to reduce market disruption. Similarly, in the event of any Bitcoin recovered from the 2016 Bitfinex hack, iFinex will use at least 80% of the net recovered value, after accounting for RRT redemptions and other costs, to burn LEO tokens within 18 months. These mechanisms aim to continually reduce the token supply and align value to the platform’s financial recovery. ^[3]

The Transparency Initiative

On June 14, 2019, Bitfinex launched the UNUS SED LEO transparency initiative to provide token holders with verifiable insight into the LEO token buyback and burn process. The program offered access to data on platform fees collected and ongoing token burns, all displayed on the UNUS SED LEO dashboard via the official website. The burn mechanism initially applied only to revenue from trading fees. Still, Bitfinex had announced plans to expand it to include all revenue sources, such as deposit and withdrawal fees, funding fees, and earnings from other exchange products, creating a more comprehensive buyback system. The burn process began at 10:00 AM UTC on June 14, 2019, with tokens burned every three hours until the full supply was removed from circulation. The total lifespan of the LEO token was ultimately tied to the amount of revenue generated across the iFinex ecosystem. ^{[7] [10] [15]}

Utility

LEO is a utility token used across the iFinex ecosystem, primarily on Bitfinex. It provides tiered fee reductions based on the average amount of LEO held over the previous month. On Bitfinex, LEO holders receive taker fee discounts on crypto-to-crypto and crypto-to-fiat trades, with deeper discounts for those having larger token amounts. Traders can also opt to pay fees in LEO, and may temporarily upgrade their fee tier using LEO. Lending activity on Bitfinex is subject to reduced fees for LEO holders, with a cap on the total discount. LEO holders benefit from reduced fees on crypto and fiat withdrawals and deposits, including preferential rates for large fiat withdrawals. On Bitfinex Derivatives, taker fees can be further reduced based on LEO holdings, up to a set limit. Similar benefits are available or planned on other iFinex platforms, such as Eosfinex, and may extend to future products and services. All fee reductions are subject to modification at iFinex’s discretion. ^[4][8]