The introduction and adherence to the VeXPolycub vault was a game changer for the future of Polycub. I've said it once and now I can say it again with even more certainty, Polycub is the best DeFi project. The introduction of the new vault will have a major impact on the price going forward because the protocol will have to buy enough polycub from the market to pay the Vexpoly stakers.

Polycub Inflation

Today Polycub inflates at a rate of 0.25 per polygon block but that will change to 0.125 around the 22nd of July. Let's take a look at the daily inflation for each of the next 3 halvings.

0.25 per block 40K Block per day = 10,000 Polycub per day

• July halving: 5,000 Polycub per day
• August halving: 2,500 Polycub per day
• September halving: 1,250 Polycub per day

I assumed an average of 40,000 blocks per day which is a little over the actual number of blocks we have been seeing recently so the daily inflation is actually lower than what I've calculated.

VeXPolycub Buyback

All the polycub that will be bought to pay the Vexpolycub vault stakers will be out of the circulating supply until late July 2024. At the time of writing, there are over 2 250 000 Polycub staked in the Vexpolycub vault. The protocol will have to pay a 20% APY to the vault so it will have to buy:

Convert the 20% APY into a monthly APR: 1.2^(1/12) = 1.53% 2,250,000 * 0.0153 = 34 425 Polycub per month

The amount of XPoly in the VeXPoly and the XPolycub/Polycub ratio will keep growing every day and as they grow the amount of Polycub the protocol has to buy per day will also grow.

September Daily deflation estimation

Assumptions for September: 110,000 Vexpolycub 1.53% Vexpoly Monthly apr
1.03 Vexpolycub/XPolycub ratio 23.50 Polycub/Poly ratio

Let's plug everything in:

110K x 1.03 x 23.50 x 1.53% / 30 = 1 358 Polycub per day

If my assumptions become a reality we will have 108 Polycub leaving the circulating supply every day after the September halving!

Deflationary Polycub

The economic meaning of deflation is the price of goods and services declining over a certain period. In the case of Polycub, it simply means that that the circulating supply will shrink every month, leading to less polycub being available on the market over time.

This will be a major milestone for Polycub. Come September the amount of polycub leaving the market will outpace the amount of polycub entering the market. The difference will only grow as Vexpoly and Xpoly keep on increasing and the monthly halvings keep on happening.

You're part of Leofinance so I'm sure I don't have to tell you what will happen to the price when the supply starts shrinking. All my predictions were made by overestimating inflation and underestimating the future growth of the Vexpolycub vault so the actual difference between inflation and deflation will be greater than what I've calculated.

Polycub is a gem and I strongly believe that it will reach $1 before the end of the year. There are so many more exciting updates coming...

Posted Using LeoFinance ^Beta