CubDeFi was long overdue for a big change. The infinite inflation proved to be impossible to sustain over the long run and the price of CUB has been free falling for a long time because of it. Falling all the way down to $0.03 over the last 18 months.

CUB Inflation

CUB is native to the Binance Smart Chain (BSC) and it inflates at the rate of 1 CUB per block. BSC has a daily block count of around 28,800. Meaning that Polycub inflates:

• Daily: 28800 CUB equivalent to $864.80
• Monthly: 864 000 CUB equivalent to $25,920
• Yearly: 10 512 000 CUB equivalent to $315,360

CUB supply is currently 16,058,142 making the inflation rate 65,46% which is very high no matter how you look at it. This was one of the main reasons why I decided to switch all my assets over to Polycub instead. IDOs were a great idea to slow down inflation and the first one went quite well but no more IDOs were offered after that.

CUB Burning

There hasn't been an official announcement from the Leofinance team about how the revenues generated from the multi-token bridge (MTB), the oracle staking, and the trading bot will be used for CUB finance. That being said Khal did hint multiple times during the AMA's about using said revenue to buy back and burn CUB. Predicting how much revenue the trading bot will generate is pretty much impossible but we can look at the remaining revenue sources and see how impactful they're going to be on the future supply of CUB.

Multi Token Bridge

Assuming the same 0.5% fee that is used for the Polycub bridge that would mean 167 CUB would be burned for every $1000 bridged over to the BSC.

X = (Yearly Inflation * CUB Price) / Bridge Fee X = (10 512 000 * 0.03) / 0.005 X = 63 072 000

In order for CUB to have 0% inflation (At current prices), the bridge would have to transact $63 072 000 a year or $172 800 a day. The bridge won't have such a high volume so the odds that CUB will become deflationary are quite slim but there are still other buyback-burn mechanisms.

Oracle Staking

Staking HBD and Hive will also create a good amount of revenue to be used in the buyback program. Just as an example let's assume the protocol is able to have 70,000 HBD in savings just like Polycub does: That would generate $14 000 of burning annually. Applying the same principles for BNB Hive assuming a 10% return that would imply another $3 183 of burning. Both staking revenues would burn around 572 766 CUB per year.

APY > Inflation = Revenue

The burning mechanism will have a major impact on the yearly inflation but it won't be enough to turn CUB into a deflationary asset anytime soon. Inflation isn't necessarily bad for tokenomics you just have to outperform inflation.

If the burning mechanics are successful enough to make the inflation rate lower than 37% that would mean that you would be gaining market share by simply depositing your CUB tokens into the CUB Kingdom. The recent update and the upcoming ones are very likely to increase the market cap of CUBDeFi. Having a growing market share in a growing market cap will generate very decent earnings for CUB investors over the long run.

Very excited no finally see some of the great Polycub tokenomics trickling down to CubDeFi. This proves how resilient the team is in creating a long-lasting and profitable platform for the investors. Instead of abandoning the project and chasing new trends they went back to the thinking board and found a way to turn CUB around.

Posted Using LeoFinance ^Beta