It has been almost a month since I shared my initial thoughts on PolyCUB and where it may be headed both price-wise and utility-wise. After watching the platform take shape some of my views have changed while others stayed the same.

Why PolyCUB?

In case you are new to PolyCUB @mikedcrypto has a great guide that can help you get started. Instead of focusing on the basics, I want to break down the best features of this yield optimizing platform that are often overlooked.

Some of those have been mentioned by Cointelegrahp but to really understand their value we need to look at the long term viability of PolyCUB as a platform and as a crucial part of a much bigger ecosystem called Leo Finance.

In short, I would say that Bonding, Protocol Owned Liquidity, Collateralization and Yield Optimization would be the main selling points for PolyCUB but let's break them all down to have a better understanding of what I am aiming at here.

Bonding

When DeFi 2.0 started gaining momentum mainly through Olympus DAO bonding was the main selling point. It created a very appealing logic for investors since every bond that you hold now has a different asset backing its value.

For those new to bonding, the process is very simple. If the protocol is looking to raise funds for Protocol Owned Liquidity (POL) they would incentivize you to purchase their bond at a discount. They are usually looking to raise LP tokens that represent liquidity on a certain exchange like Uniswap. In this situation, the protocol can offer to issue bonds in the form of tokens for investors that are willing to sell their BTC/ETH LP tokens (or any other) and receive a 10 or 20% bonus on their purchase.

In layman's terms, if you sell $100 worth of BTC/ETH LP tokens you will get $110 or $120 worth of OHM or Polycub tokens in return depending on the discount rate. To prevent people from instantly selling these tokens for easy profits there is usually a vesting period of 5 days meaning that you will get your tokens 5 days after you have made the purchase.

Protocol Owned Liquidity

While you are waiting for your bonds the protocol will use the tokens you just sold and earn passive income with them. The strategy for generating income is different for every protocol and PolyCUB will be introducing new ones as the platform matures and generates more POL. You can get more information on that in the docs.

This income is distributed to xPolycub stakers which now act as shareholders. By staking PolyCUB they earn the right to many different rewards which currently include: 50% of all farming rewards that are claimed early (90 day lockup period otherwise), initial token distribution, and POL generated income.

Collateralized Lending

This feature is still in the works but we can safely assume that it will be available on the platform soon enough. In case you didn't know, leading can be very useful, especially in DeFi. Lending platforms allow you to unlock the value of your assets without selling them. Once lending becomes an option on PolyCUB there are a number of opportunities that open up.

If you want to be a long-term holder and extract the maximum value out of your tokens you can simply purchase Polycub through bonding or on the open market > stake it into xPolycub > use xPolycub as collateral to take out a 50% loan (or more) > purchase more Polycub on the market > stake it into xPolycub > use xPolycub as collateral to take out a loan...

You can see where this is going...

The process may seem complicated but in short, lending platforms can't give you loans larger than roughly 75% of your underlying collateral asset value but there is nothing preventing you from purchasing more of that same asset with a loan and depositing it into the same lending protocol, reducing your loan margin in the process. The rewards that you generate throuhg xPolycub can then be used to slowly pay back your loan or increase your position further.

Also, always make sure that you understand how liquidation works before doing any of this.

Yield Optimization

This feature was first introduced in the form of Kindogms on Cub Finance. While it may seem simple, I personally find it very useful. If you are farming for the long term and want to get the most value out of your position you want to compound your earnings as frequently as possible. The problem is that it's either not worth it due to gas fees or it is simply too much work so we do it once a day, a week, or a month.

With PolyCUB Kingdoms that feature is offered for a few pools on Sushiswap and Curve increasing your farming potential by quite a lot. It is a simple but very useful product that brings profits to xPolycub holders in the form of fees. Fees that are minor compared to the value Kindsoms can provide to you so it is a win-win situation.

Final Thoughts

In its final form, PolyCUB may easily become the most useful DeFi 2.0 platform on Polygon but we still have a long way to go. Once lending is introduced it will surely be a game-changer because a lot of people will start realizing the value of this simple but powerful DeFi tool.

This creates one more revenue stream for those that are willing to become lenders and earn fees from loans attracting even more users and liquidity to the platform.

Do not be surprised if PolyCUB becomes a one-stop shop for everything DeFi in the future but again, we are a long way from home. The good thing is that we are getting the best of all worlds when it comes to features like bonding, POL, and lending. Other protocols had enough time to test them out and now we can use what works and disregard what doesn't.

Posted Using LeoFinance ^Beta