Yes, on re-read you are correct. The whitepaper says:
>In this ICO, you don’t send STEEM to the issuer in exchange for tokens. Instead, you
vest STEEM (to yourself), and tokens are issued to you equal to the STEEM you vested.

So it is newly vested STEEM (to yourself) which is your payment into the ICO. Not sure why anyone would really want to do this, but it's an interesting concept. Would love to hear a use case.