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pHive, Polycub DAO and the future

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Belemo
@belemo
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If you've been keeping up with developments in Polycub, you'll know that there's this new voting consensus thing that came into the scene. In this voting mechanism, the number of Xpolycub you stake determines the weight of your vote.

The first vote that was carried out led to a reduction in Polycub lock-up period from 90 days to 30 days. This move means that the lock-up period on Polycub is exactly like what you get with Hive savings, with the only difference being in the early unlocking penalty that Polycub has.

Thinking about it though, I think it would actually be pretty cool if Hive had a feature that enables early unlocking but at a penalty. The funds generated from the penalty could just go into the DHF or maybe even be used for some charitable ventures.

Anyway, changing the lock period hasn't exactly been good for the price of Polycub in the short term, at least. At the time of writing, we have Polycub trading all the way down at a frustrating 18 cents.

Just like the previous iteration on Binance Smart Chain, Cubfinance, we have Polycub being aggressively dumped by farmers. This hardcore dumping had persisted even when the lock-up period was 90 days, with this reduction, we should expect even more aggressive dumping.

This is obviously not the situation I hoped for, at this stage of development, but alas, that's where we are right now. At the time of writing, the dumpers see no reason to hold, so they're selling off whatever they farm.

Personally, I'm not on any farm on Polycub, but I have a farming operation in Cubfinance that constantly takes hits whenever people dump. So, I totally understand how Polcub farmers that hold must be feeling right now.

DAO and voting

The Leofinance team is working hard to bring more utility and value to the project. The introduction of Xpolycub stake based voting was a nice touch, as this will increase interest in Xpolycub staking.

Unfortunately for XPolycub, as people dump Polycub, the dollar valuation also reduces, even though the ratio never goes down. There's also the fact that the minting rate of Polycub will continue reducing as the months go by, so at some point that could actually bolster the dollar value of Xpolycub/Polycub sometime in the future.

For now, at least, what we have is XPolycub that determines the weight of your vote on the platform. So, if you want to make changes that you believe will be beneficial for polycub, stake XPolycub.

Hive emphasis

There's no denying that while Polycub is running on Polygon network, the project is very much a Hive thing. This is evident in the swift addition of pHBD into the stable coin farm, as well as the recent talks about pHive coming soon.

If I were a gambling man, I'd bet on the chances that at least 70% of Polycub investors are from Hive. Yeah, there were rounds of marketing on Cointelegraph but at the end of the day, it is still mostly Hive people in the mix.

This interest by the Hive community is also why the introduction of pHive, a Polygon wrapped version of Hive coin is imminent. Here is an excerpt from @leofinance's recent publication

The pHIVE-POLYCUB Vault Accrues Value for POLYCUB in 5 Ways:

  • pHIVE held as 1:1 collateral for the wrapped equivalent - staked as HIVE POWER to earn on-chain rewards = value accrual for PolyCUB's PoL
  • pHIVE 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
  • pHIVE cross-chain arbitrage = value accrual for PolyCUB's PoL
  • pHIVE-POLYCUB = utility for people to buy POLYCUB to LP against - their pHIVE = value accrual for PolyCUB's PoL
  • pHIVE-POLYCUB holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive pHIVE-POLYCUB vault yield higher

In summary, the plan is to add a new source of income for the Protocol owned Liquidity that will invariably determine the Risk free value of Polycub. The Risk free value(RFV) is basically the floor price of Polycub that is determined by dividing the dollar value of the PoL by the total number of Polycub tokens in circulation.

In the short term, when the minting rate of Polycub is still quite higher than what it will be in say, one year, the RFV will most likely be dropping because of hardcore farmers. However, if the PoL continues to bolster its stocks by diversifying into various revenue sources that include Hive, HBD, Bitcoin and a variety of other assets that will be chosen through the voting DAO, the future could be brighter.

In Summary

At the time of writing, things aren't exactly where we want them to be. Another round of dumping could see Cub token trading below 10 cents and Polycub could follow a few days later.

I'd understand if anyone decides to rage quit because it really sucks to see number consistently going down. However, the consolation is that the devs are working hard to add more sources of value through various wrapped assets and vaults in the project.

I'm going to soldier through this tough period because I believe that things will start to take shape somewhere down the line. Until then, we wait and continue to develop the platform.

Posted Using LeoFinance Beta