How does Cub Finance add value to LEO?
Direct from the desk of Dane Williams.
By offering FREE yield to the bLEO:BNB LP, Cub Finance adds real value to the LEO token.
I don’t know about you, but I’m balls deep in LEO - Not CUB.
So all of the talk about how much work is going into Cub Finance and how strong the MTB makes its tokenomics, certainly grinds my gears.
I mean come on team, fuck Cub.
Put that work into strengthening the OG LEO token instead!
But as the price of CUB continues to rise - and the APRs being paid out to all LPs on the platform rise alongside with it - I’m finally seeing the light.
Cub Finance adds value to LEO by hosting a LEO sided LP and essentially offering free yield to those inside.
Let’s talk about how, why and what this could realistically mean for the price of LEO itself.
Hint: 🚀
How does CUB remain sustainable?
For Cub Finance to add value to LEO, its token first needs to be sustainable itself.
An outcome that since switching to a model where it is able to derive revenue from the multi token bridge, CUB has been able to reach.
It’s all about that MTB, baby!
The MTB generates revenue through:
- Wrapping Fees
- Oracle Staking
- Internal Arbitrage
This revenue is then used to buy CUB and burn it over and over again with the idea that you now have a more scarce asset that generates ongoing demand due to the platform’s ability to offer higher yields for providing liquidity to all LPs.
What we’re seeing happening is more HIVE and LEO being wrapped to earn the higher CUB yields on offer.
Making the pools deeper and arbitrage opportunities in HIVE and LEO more lucrative.
Thus creating more wrapping churn through the bridge and creating an outcome that continues to feed into itself.
A self fulfilling prophecy if you will.
Why would CUB finance give free yield to LEO?
So as you can see from the above, Cub Finance isn’t simply throwing LEO a bone for the sake of it.
CUB massively benefits from offering yield to non CUB sided LPs like LEO too.
So now we know that Cub Finance relies on revenue from the MTB, that means the platform needs to give a reason for someone to take their tokens and push them through the bridge.
The most simple reason being that they can earn a higher yield on their LEO than if they left it powered up in their Hive wallet.
According to HiveStats, my current LEO curation APR is sitting at 9% for the month.
Let’s now compare that with what I can earn by bridging my native LEO to bLEO and adding it to the bLEO:BNB LP:
28%.
With the only risk that I end up scaling my LEO into BNB if price rips, that’s quite the incentive to bridge it into Cub Finance!
And yep, bridging means revenue and value for CUB.
That’s why the platform offers free yield to LEO.
Does this mean that Cub Finance adds value to HIVE too?
Ding ding ding!
By offering HIVE sided LPs, Cub Finance also adds value to HIVE too.
The bHBD:bHIVE LP on Cub Finance is currently paying 27%:
While someone who is fully powered up and using their stake to curate can earn 13% or so… if they’re lucky.
Granted, the bHBD side of the LP caps your upside potential if the price of HIVE rips.
But that is why savvy investors won’t be all in on the LPs and simply using them as part of a wider investment strategy to stack more HIVE.
With the yield once again not coming from HIVE’s own inflation, the potential is still there for investors to stock up and earn what is essentially free money in these HIVE sided LPs.
Yield that can only be achieved if investors earn CUB revenue by pushing their HIVE through the MTB!
What does this mean for the price of LEO?
When I say add value to LEO, of course I mean price.
And the sustainability of CUB alone literally has the potential to not only keep the LEO price sustainable.
But actually moon price!
Right now LEO is a $750,000 market cap token that you can earn a sustainable 30% yield from, without touching LEO’s own inflation.
I’ll let you do the math on how much money needs to go into that LP for the price of LEO with its current emissions, to hit 10c, 50c, $1 and beyond.
When you think about it like that, shit starts to get real.
As for the price of HIVE, the value added is the same,
However, we’re no longer talking about a token with a measly $750K market cap.
HIVE’s current market cap of $218 million makes moving the price needle via incentivising yield a little harder.
Harder, yes.
But not impossible!
In my opinion, the Hive community owes the LeoFinance team a ton of gratitude for what they’re doing here.
So much potential value can be added to the HIVE token through Cub Finance alone!
Final thoughts on the value that Cub Finance adds to LEO
Next time you’re like me and having your gears ground down by hearing how strong the MTB makes CUB’s tokenomics, don’t worry.
Remember that by offering FREE yield to the bLEO:BNB LP, Cub Finance is adding real value to the LEO token.
The relationship is symbiotic and there's a place for both in the Leoverse.
With LEO’s market cap being as small as it is, the yields offered on the pair’s Cub Finance listing will at the very least stabilise the price.
With the potential to moon price once people outside of our tiny bubble realise the free money being offered.
Soon.
Best of probabilities to you.
PS. This is only investment advice for people named Dane.
For everyone else, this is for entertainment purposes only.
Posted Using LeoFinance Beta
CUB is starting to look more sustainable and another thing I would look at would be the trading volume for certain pools. I have noticed it on tribaldex but having a good pool with tons of volume also generates a decent amount of fees that will also grow your position and offset some of the IL.
Posted Using LeoFinance Beta
On Tribaldex Deisel Pools, fees are definitely a nice little bonus.
But I didn't think BSC LPs paid the trading fees into your position in the same way?
Posted Using LeoFinance Beta
I believe it works the same way but there is no interface to see how much you earned from fees. At least I haven't heard of one.
Posted Using LeoFinance Beta
Well I'd like to think Khal will be hoping to sustain cub while also moving Leo up the ropes as well. But like you said, Leo's the flagship project and also the entry point to the Leo verse, hence we need a good standing there.
Posted Using LeoFinance Beta
CUB is generating fees from the MTB, primarily from HIVE and HBD.
So it's sort of doing the same thing and taking value from an external source in order to find stability.
HIVE is large enough that it can support CUB.
Then CUB can support LEO!
Posted Using LeoFinance Beta
Well that sounds about right and it's something we can work with as well. I'm not really the techie guy, but it's obvious here that the Leo ecosystem will gain a lot by paying a lot of attention to leo.
Would appreciate if you elaborate on this.
So much is being accomplished with little here.
The potential is massive. What excites me is the fact that the markets is cyclical, Leo in the next bull run will make so much noise.
Posted Using LeoFinance Beta
What I mean is that by pooling your LEO with BNB, you risk losing some of your LEO to impermanent loss if price goes up big.
But if you think that BNB ha a future itself (which I do), you could view impermanent loss as just DCA buying into that token.
Posted Using LeoFinance Beta
I agree with this line of reasoning based on my past experience. Specifically, when Leofinance first ventured off the Hive Blockchain, it created WLEO an ERC token and paired it with Ethereum on Uniswap. Then the Bull Market took Ethereums price from 120 to over 2000. WLEO, and LEO price went to 1 dollar from around 10 cents. It was an amazing time. It is entirely possible that when the next bull run hits, the pairing of WLEO to ETH, and BLEO to BNB will have a similar effect. I expect both ETH and BNB to rise in the next bull run, and I expect WLEO and BLEO to be taken along for the ride up. Incidentally, the PLEO-MATIC pairing may have the same effect on PLEO. In each ecosystem, a LEO substitute is paired with the gas token for that ecosystem; ETH, BNB and MATIC. These pairs create an equilibrium between the LEO substitute and that gas token, and the LEO bridge creates powerful arbitrage which balances the price between the three, so all see an increase it any see am=n increase, and the converse if true also.
This is just another reason I am so bullish about the LEO token. I understand why LEO investors feel like LEO has been ignored or allowed to wither on the vine, while Khal and team created Cubfinance, and Polycub on Binance and Polygon respectfully. The creation of Cub saw people selling their LEO to invest in Cubfinance, and the creation of PolyCub saw people selling there Cub and BLEO to invest in PolyCub. But additionally the bear market caused a huge 70% drop in the price of ETH, BNB and MATIC. We saw the effect of this equilibrium between ETH-WLEO and BNB-BLEO and the arbitrage between WLEO and BLEO drop the price of both WLEO and BLEO when the price of ETH and BNB fell, as well as the fall in the price of every other ALTCOIN as people fled altcoins and ecchanged their altcoins into stablecoins, like they do every bear market.
The truly crazy thing is that after you exit altcoins and move your profits into stables, yiu need to guess the bottom, and then move your money back into altcoins from stables to get the maximal amount of profit, and increase your altcoin power for the next bullrun.
For example, you amassed 1000 LEO in the last bull run, and yiu didn't exit at 1.20 per LEO, but instead exited at a dollar, then waited until now, LEO at 5 cents to re-enter. It seems crazy to buy at 5 cents, but buying now gives you 20,000 LEO headinging into the next bull market. And your vote will be 20 times as big.
This is the true reward of the cryptocurrency game, playing the long game, selling near the high, and buying near the low, grind more tokens, rinse and repeat.
Its the long game of bull and bear markets and it's the importance of picking tokens with strong communities, strong leadership, and lots of both leaders and community members who are committed to the token longterm.
Bitcoin has been pronounced dead around 10 times, and has only had about 5-6 bull and bear markets. Those who played the long game are rich now. They picked the rif=ght token, the right leadership and the right community. Ethereum similar story.
Cryptocurrency is hard to fanthom, and hard to time, as many who knew this would happen still didn't exit altcoins soon enough and are still waiting on the sidelines with their cash in stables, or rode an altcoin to the bottom, and don't have cash to re-enter now.
Don't interpret this as directions, nor take this as advice. But instead read this as my journey, and my version of the history of the cryptocurrrency coins with strong communities and steady leadership.
This my interpretation or my point of view, of Bitcoin, Ethereum, and XRP, not exclusively, but just to name a few. Some would add Hive to this list, as Hive went from 5 cents to 2? dollars, and now to 50 cents.
Strong leadership, constant development, loyal community, widespread belief in the future of the token based on development and utility. This is what I have learned are markers of value and the ability to recover from current historical price lows and exceed previous price highs.
Posted Using LeoFinance Beta
Thanks for sharing your journey and advice.
Your experience in the WLEO pool through what is now multiple market cycles will be invaluable going forward.
The advice I would add here is that as your LP position is completely liquid, you can enter and exit as you please.
If you see one side of your LP moving fast and don't want to be exposed to the impermanent loss, then you can exit the pool immediately and just go back to holding the tokens individually.
People that complain about losing big to impermanent loss have no right to do so as they simply managed their positions poorly.
Posted Using LeoFinance Beta
Interesting article, and I agree Cubfinance does benefit Leo in the ways described.
Posted Using LeoFinance Beta
I'm fairly new to this kinds of things that is why I love reading articles explaining how it works.
I think this "buy back" strategy is the major cause of the price increase of LEO that started few days ago.
!1UP
Posted Using LeoFinance Beta
Keep in mind that the team isn't buying back and burning LEO yet - The current buy/burns are only on CUB.
This means that the price rise we're seeing in LEO is all due to organic buying.
A contributing factor driving demand being the fact that CUB is now stable and therefore the 27% APRs offered to those in the bLEO:BNB LP are sustainable.
Exciting times for the whole LEO ecosystem!
Posted Using LeoFinance Beta
This is great news. I am already imagining how it would look like if there would also be a buy back for LEO. 😊
Yep, you're not alone fantasising about LEO buybacks haha!
We should already be maximising the value of content on leofinance.io by using ad revenue to buy/burn LEO off the market.
This will incentivise higher quality content and once investors realise that more page views are all that they need to do to make LEO's price floor go up, everything will snowball.
Posted Using LeoFinance Beta
You have received a 1UP from @thecuriousfool!
@leo-curator, @ctp-curator, @bee-curator, @neoxag-curator, @pal-curator, @cent-curator
And they will bring !PIZZA 🍕.
Learn more about our delegation service to earn daily rewards. Join the Cartel on Discord.
I gifted $PIZZA slices here:
@curation-cartel(2/20) tipped @forexbrokr (x1)
Send $PIZZA tips in Discord via tip.cc!
This is a way better explanation of why Cub Finance is adding value to the Hive & Leo Finance ecosystems. I am also using BHBD-BUSD to stack more Hive. Not sure when will the price of CUB recovers but at the current Hive price, it seems like a great deal to convert all of my yield to Hive.
🤤
Posted Using LeoFinance Beta
The early price of CUB was purely on the back of speculation.
It's not getting back to those prices any time soon...
All that matters now is that CUB is sustainable and as such, price remains steady.
For anyone who bought in high, there is certainly an opportunity to make their money back and more by pooling at these low/stable prices and selling rewards.
Posted Using LeoFinance Beta
So until recently Cub Finance didn't have LPs for HIVE and HBD, which is one reason its price was falling like a stone for a while; is that correct? That absence contributed to the lack of value of CUB and Cub Finance, right?
If so, then the addition of both the LPs and the MTB was a game-changer for CUB.
I don't have the answers; I'm asking in order to confirm.
Posted Using LeoFinance Beta
The price of CUB was falling because more people were selling it than buying it.
Fresh CUB was being printed to pay LP rewards, which would then be sold.
A cycle that caused price to spiral down because there was no incentive for buyers to step in to match the sellers.
But now that the MTB generates revenue from HIVE wrapping fees, the platform itself has become a buyer of CUB.
The MTB is making enough money right now to match those selling the fresh CUB being printed and sold as LP rewards.
Hence price has found a sustainable equilibrium point.
The game changer is that the Cub platform itself is generating revenue from an external source (bridge fees paid by people coming from Hive to chase higher yields).
Enough revenue that at a 2.5c CUB price, the platform alone is able to buy ALL of the CUB being sold by those selling the rewards they're earning.
Posted Using LeoFinance Beta