Source:dextools.io

I have been sitting back and watching CUB prices rise and fall over the last few weeks, and have noticed a few patterns.

The transactions that are large enough to move the CUB price (seen by the big vertical lines in the chart), tend to be people depositing or withdrawing from the CUB Kingdom. So I have been watching what happens when the CUB price moves up and down.

What happens to the yield on CUB Kingdoms when the price drops

I noticed that when the price moves down substantially, there are withdrawals for the CUB kingdom. If the CUB is then sold, it ends up in the liquidity pools.

So overall there is less CUB in the kingdom, and given the multiplier is fixed, and the inflation is fixed, this means as a percentage the yield is higher. Great for CUB kingdom Hodlers

what happens when the price goes up?

The same thing happens in reverse, the liquidity pools loose CUB, and that is deposited in the kingdoms. More CUB in kingdoms means sharing the same inflation among more CUB. This drops the overall yields

So does yield impact price?

I believe the yield on the kingdoms does impact price somewhat, if the yield is higher it attracts more buyers, if the yield is lower investors cash-out.

This means that the kingdoms have some mean reversion features, meaning that the volatility is dampened a little, by the desire for high yields form investors.

This is great to know, so it means when the price is low its good to accumulate CUB ,so you can earn a higher yield, and capitalise on it when the price rises.

How do we know when the price is low?

So when to invest? well, I'm not about to pick the right time, and I am not about to tell you when it is cheap or expensive because I don't know. I just know if I hodl for long enough I accumulate more coins in the lows, which is a benefit for when the price rises (if it does ofcourse)

So what about burns?

Well burns (like fees, and IDO amounts) are like purchases, because they purchase CUB, but the good thing is they don't reduce yield because no CUB is deposited in the kingdom. So that means I am really looking forward to the IDOs as that will create lots of burns, potentially increasing the price, without the corresponding reduction in the yield in the kingdoms.

So keep an eye out for the IDOs, I am sure they will be announced "soon" and then look forward to the impact that the burns have on CUB!

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