CUB: Quantifying Sustainability
Sustainability is the central subject of interest in any DeFi project out there. Though CUB is only halfway through migrating into the new model of tokenomics, the fruits are already beginning to bear themselves. The majority of the selling pressure has been greatly decimated since the migration of the of non-CUB farms, mitigating much of the ballistic price movement. But that can only tell you so much in regards to the effectiveness of Kingdoms.
Sustainability, specifically in the DeFi sphere, is defined simply as keeping the burned supply in close proximity to the total circulating supply. This is universally done through taxing providable instruments and services, most popular tool of which is outsourcing user's funds to other platforms for both compounding the user's funds as well as taxing those rewards. Some, such as PantherSwap, employ a much more aggressive and intrusive fee structure, taxing every transfer in the platform with hefty percentages. CUB lies in the former liminal when it comes to conducting fees.
The presently deprecated farms have had much of their harvestable rewards sold off on the spot. Previous to the migration, the traditional route of entering the CUB ecosystem was through hard-asset farms and dens such as BTCB or USDT-BUSD, which leaves the user's only interaction with CUB's ecosystem to be a strictly subtractive one-- Sell your harvest and withdraw your funds.
With Kingdom's advent, higher APRs whilst maintaining maintaining a lower instream of CUB rewards is now possible, and their impact on sustainability are tangible. After Kingdoms become fully-fledged and the deprecation of the remaining farms/dens are complete, the only entrances into CUB left are ones that inherently add value to the ecosystem, such as through facilitating trades with the CUB-BUSD/BNB Farms, or deepening the LeoBridge via the bLEO-BNB farm. Other than that, entering Kingdoms with your hard asset with the intent of selling is only going to yield higher buyback potential, enough to outdo the selling pressure for when the harvest is sold off.
With an effective, taxable TVL of $1.1M locked inside the kingdoms, in addition to the upcoming CUB lottery creating another sinkhole, this is, at the time of writing, the updated fee structure sustaining CUB, complete with all the numbers moving about.
Dividends
Quantifying the dividends was something I wanted to do since my last post.
$35 dollars worth of BNB is going to be distributed to the CUB kingdom, each according to how large the users' stakes are. We can calculate how much BNB is going to be sent to a stakeholder of, say, 1000 CUB by simply dividing the BNB rewards over the CUB amount equivalent to the TVL, which can be expressed by the following equation:
Staking 1000 CUB will equate to a daily payout in the ballpark of 0.00009 BNB, and in order to be rewarded adequately, one has to have staked at least 10,000 CUBs in the Kingdom to be earning enough to barely cover the harvest transaction fee. On it's own, this amount really only becomes impressive when the TVL crosses the 10x barrier. But by and large, the CUB kingdom is arguably the biggest player with the most potential in this Tri-Token ecosystem.
Of course, the factors affecting this distribution are seated on both the price of BNB and the base asset Kingdoms, as well as the TVL of CUB kingdom. Another possible factor that could be implemented is the direct injection of rewards gathered from both the lottery and from the LeoBridge fees. Seeing as how, in just four days, the %7 portion of the management fees reliably rivals LeoBridge's all-time fees collection, the LeoBridge fees could be used to fund the BNB reward pool instead of buying back CUB.
Another point of discussion is the upcoming lottery, which is an easy implementation in the larger scheme of things. The lottery offers a unique way of diverging much of the inflation directly into the prize pot. Using PancakeSwap as a comparison, the collective dollar value of the tickets bought generally exceed the value of the prize by a considerable margin, resulting in a positive-sum game for CUB.
Conclusion
The ecosystem is nearing perfection, and almost all the bargaining chips are down to conduct a proper marketing campaign for CUB. I used to think it was too optimistic to think that CUB is cheap, but after plotting the flow charts and crunching the numbers, I'm of the opinion that CUB is massively oversold.
Posted Using LeoFinance Beta
