How to Exponentially Deepen PolyCUB Liquidity
One major issue facing POLYCUB is a lack of trading liquidity. Right now, there is only about $330k in liquidity for anyone who's trading POLYCUB.
This has led to some cascading effects - especially with the airdrop still ongoing. The airdrop is releasing over 16k new POLYCUB every single day. With the airdrop ending on May 4th along with the POLYCUB halvening from 1 POLYCUB / block to 0.5 POLYCUB / block, we're going to see a dramatic reduction in the amount of POLYCUB hitting the market.
This is likely to have a beneficial impact - as a large % has been dumped onto the market from the airdrop. The hard fact remains that a lack of liquidity for POLYCUB is what has caused such a cascading impact on the price.
POLYCUB is designed to be a super sustainable, long-term yield optimizer platform. We've built mechanics to ensure this in a wide variety of ways. What happens between here and there can be a bumpy ride - as we've seen.
PolyCUB V2: A Full 180 Degree Turn in Vault Dynamics
The new POLYCUB V2 vaults have been discussed a few times. The name can be slightly confusing - this V2 deployment is not a migration of any existing POLYCUB vaults. Instead, it is the deployment of a new style of vaults that we haven't seen anyone in the DeFi landscape tackle.
The first of these vaults was pHBD. pHBD was a bit of a trial run for us. We wanted to see just how much value could be accrued for the protocol liquidity. It turns out, quite a lot.
The protocol liquidity is earning several thousands of dollars per month from pHBD and that is with a pHBD-USDC Liquidity Pool of only $323k. We believe this number will grow exponentially in the future - as it is already growing steadily each and every day. Now, thousands of dollars in value will be used to buy POLYCUB on the open market through the following methods of value accrual:
- pHBD - native HBD held as 1:1 collateral for the wrapped equivalent - staked on the Hive blockchain earning 20% APR = value accrual for PolyCUB's PoL
- pHBD 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- pHBD cross-chain arbitrage = value accrual for PolyCUB's PoL
- pHBD-USDC LPs need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive pHBD-USDC vault yield higher
Our next vaults that will be deployed are:
- pHIVE-POLYCUB
- pSPS-POLYCUB
After that, we'll start to show you some crazy stuff (pRUNE, anyone?).
This is why we're calling this move a complete 180 degree turn in the direction of PolyCUB. Right now, we have a certain vault setup with Kingdoms that we've learned isn't nearly sustainable enough. With the new vaults, we're pairing all new asset listings against POLYCUB. This means that pHIVE is paired with POLYCUB, pSPS is paired with POLYCUB, pRUNE is paired with POLYCUB.
What's at the center of this? Liquidity.
With each new vault launch, there's a new pairing against POLYCUB. That means that every single dollar that gets pooled on the platform in one of these vaults is generating deeper liquidity for the POLYCUB token while simultaneously driving monthly revenue into PolyCUB Protocol Liquidity which ultimately buys POLYCUB and distributes it back into the daily rewards pool for LPs.
After spending a lot of time researching the economics of POLYCUB and how the rollout has performed, we realized that "V1 Vaults" (the original Kingdoms vaults, etc.) on PolyCUB don't generate enough value. Each $1 that enters one of those vaults is earning yield and not providing enough value to cover that yield generation for the protocol at large.
The new vaults generate value capture for the PolyCUB platform through 5 methods. These methods mean that ever $1 that enters the platform generates more long-term value for the platform than the yield it pays out. This is possible thanks to value capture, collateralization and perhaps the most important; ever-deepening liquidity for POLYCUB trading:
- insert_hive_asset (i.e. pHIVE or pSPS, etc.) - held as 1:1 collateral for the wrapped equivalent - staked on native platform (i.e. HIVE POWER or SPS staking on splinterlands.com) = value accrual for PolyCUB's PoL
- insert_hive_asset 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- insert_hive_asset cross-chain arbitrage = value accrual for PolyCUB's PoL
- insert_hive_asset-POLYCUB = utility for people to buy POLYCUB to LP against - their insert_hive_asset = value accrual for PolyCUB's PoL
- insert_hive_asset-POLYCUB holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive insert_hive_asset-POLYCUB vault yield higher
The Ever-Deepening Liquidity of POLYCUB
This marks a complete 180 degree turn in the direction of POLYCUB. Instead of offering Kingdoms - which only accrue value for PolyCUB PoL through 1 method (management fees) - we're deploying Vaults V2 - which accrue value for POLYCUB through 5 methods (staking collateral, wrapping fees, internal arbitrage, lp utility, governance control).
This leads us to some incredibly important effects. With all of these new vaults, each will be paired against POLYCUB. This means that effectively, the launch of every single new vault will lead to more trading liquidity for POLYCUB on the Polygon network.
As liquidity builds, stability builds with it. The crazy part is that as liquidity builds sustainability also builds with it. This is thanks to those 5 value accrual methods. As more liquidity gets added, more trading volume occurs. As more trading volume occurs, more liquidity gets added due to deepening incentives. Black hole theory, anyone?
On top of all this, the Protocol Owned Liquidity will be earning massive value accrual from these vaults and all of this value accrual will deliver permanent liquidity which ultimately feeds black hole theory even further.
The Future of PolyCUB
The future of PolyCUB is looking a lot brighter under this model. We just released xPOLYCUB Governance last week which was a key step in the path to this change. We needed governance to be live in order to give the community the keys to the kingdom and allow them to control the yield dynamics.
Having the community control the yield dynamics with stake-weighted voting based on xPOLYCUB stake and then releasing a dozen vaults for Hive-based tokens to get listed on PolyCUB is transformative as well. This will create a struggle for control over which vaults should earn the most yield.
Splinterlands community may battle with the LEO community who may battle with the CTP community who may battle with the HBD community to acquire more xPOLYCUB stake and vote up their own vault in the governance system.
pHIVE is coming VerySoon, get your liquid HIVE ready in the next 48 hours!
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage and share content on the blockchain while earning cryptocurrency rewards.
Our mission is to put Web3 in the palm of your hands.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
LeoMobile (IOS): https://testflight.apple.com/join/cskYPK1a
LeoMobile (Android): https://play.google.com/store/apps/details?id=io.leofi.mobile
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
Polygon HBD (pHBD): https://wleo.io/hbd
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
LEO Wrapping Bridge: https://wleo.io
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This definitely shouldn't stop more cubs from been stake because it's a win-win situation in the blockchain to achieve more benefits and rewards in the nearest future. Experiencing a dip in price is not new instead it boost the ideology of having more cubs stake which is the best decision to take.
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Trying to wrap my head around this comment is like learning chemistry 🙂🥲
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😂
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Definitely ,I sincerely agree with you,dip in price should either strengthen one's ability to acquire more
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It is the best move to take in staking more cubs
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Honestly the best time to acquire any token is during the dip stage too,so getting more right now is vita
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The dip stage as been said is the best time in accumulating more stakes so utilizing the opportunity isn't a bad one at all
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My dear friend, you have a valid point and the LeoFinance team should look for quick means to restore the status of Cub on time to encourage it's growth.
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I totally agree with you on that
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Your on top my dear brother
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Lol, I think you may have a shot at getting more, just tell daddy bitcoin to keep messing with the Crypto markets and pCub might slightly fall for you to dive in...
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This may not take long.
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LOL we will have to manipulate the market just for you.
I will put in a ticket on Leofinance discord to get them on it.
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Now that’s a ticket that I’d love to ignore
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Interesting mechanism with the v2 vaults. Tying up every added token to PolyCub would generate enough liquidity. I think it's quite similar with was done on the thorchain. Looking to see how it all helps PolyCub regain more value again.
Awesome. Right about time to get me some hive
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It's ideal to tie with polycub, it doesn't just increase liquidity, it takes off polycubs that would have potentially be sold to stake for yields
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Yeah, Exactly. Drives in more value to PolyCub. Very great move from the team.
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You and Jersteemit are exactly right. Any yield that was earned previously and sold off to compound back into a kingdoms position will now be compounded into POLYCUB pairs.
This means that in a straight equation world, 50% of the PolyCub that was sold to compound positions previously will now no longer be sold (since pools are 50/50 PolyCub).
And this also means that if users compound like this, they are selling but also providing liquidity simultaneously. Liquidity builds over time and the platform gains more revenue fees through the 5 methods mentioned in this post.
It’s amazing to think about
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There is immediate buy pressure since we the liquidity pools will have to be filled with an equal amount of POLYCUB.
Get a few million in each of them and we will see how the price of POLYCUB has to escalate.
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Yeah I have a feeling this is going to work out extremely well for Polycub as each vault generates massive revenue used to buy PolyCub each week + each new vault adds liquidity for PolyCUB to make the token more easily traceable.
Permanent liquidity is also built through the synthetic model we’re building. We’ll talk about that in the future of the sooniverse!
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This is where it will be very interesting, but if the price is very low in others to get more polyCUB and stake which is the best decision for now.
I have a weird feeling things are going to look very gloomy until they don’t ;)
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👀 my reaction when I saw the last message;
I believe this will be bigger than pHBD vault since hive is more liquid, damn, we may just drive a lot hive to polycub!
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Hmmn im getting so much ideas. I’ve been trying to hold some liquid hive, now I can put it to work while liquid. That’s actually cool. I might just ape in. It will be interesting to see what the apr will be
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This is definitely one of the best thing to do in the period too,I sincerely think shifting attention to this edge too is a very good one
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FYI: by bigger I mean liquidity, I doubt the Apr will be bigger than HBD, a 10-20% Apr is something to be honest, that's bigger than hive power returns
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The APR could very likely remain well above 20%. This remains to be seen but growth in POLYCUB’s PoL driven by pHBD, pHIVE, pSPS, pRUNE will all lead to exponential value creation:
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The LP incentives for staking HIVE will likely be pretty high to accommodate for driving liquidity into the vault. The base APR of staking HP on-chain for 8-10% will definitely be surpassed by a large margin
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As I thought. Can’t wait to see it
It will be bigger than pHBD naturally since there is a lot more HIVE liquid than HBD.
This is going to be a very nice onramp.
What could actually be bigger is the pSPS pool. That is another nice option for Polycub.
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Why is this so, please I'm a bit confused about the comparison.
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It could be bigger because SPS is a splinterlands token, one of the most actively played blockchain games built of hive, which means more daily volumes!
Thank you so much for the explanation, I'm a believer of blockchain gamings.
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