Understanding PolyCub Collateralized Lending(My Apple Tree Illustration)
It’s that time of the day where you get another update about polycub but instead of the regular “buy polycub, stake it and you earn auto compounding rewards”. This time the announcement is different. I’m talking about polycub collateralized lending and may be some few insights on cryptopotato post about polycub.
So the Leofinance team have been talking about achieving massive PR, which they have been executing. The PR push has been excellent, we have had some reputable crypto blogs talk about Polycub, which I have mentioned in my past blogs. But I forgot to show you that if cryptopotato. You can read PolyCUB Announced the Launch of its Yield Optimizer on Polygon by cryptopotato. Now if someone googled polycub while trying to do their own research before investing, they now have variety of blogs to read from and feel more confident about investing in polycub.
Leofinance made a post Introducing the PolyCUB Roadmap | xPOLYCUB, Bonding and Collateralized Lending and the part that caught my attention is the collateralized lending. This is because sometime last year, I wrote a post about a self repaying loan, which I wish I could source out from my enormous list of content to show you. Now seeing the Leofinance team implementing something like that but with its own uniques special mechanic and technology got me speechless.
Based on my understanding, according to what the post said on how the the collateralized lending will work, it’s going to involve, buying a polycub, after buying the polycub to get some XPolycub you need to stake the polycub in XPolycub so you can receive XPolycub. I don’t know how the UI or how the mechanics will be but I guess they will be some kind of a separate collateralized lending contract where you stake your XPolycub. Just like we understand how collateral works, it’s something you put down when you want to take a loan. So when you stake your XPolycub token in the collateralized lending contract, being a smart contract on the blockchain, it will grant you access to USDC loans. This way, you don’t have to sell your XPolycub token just incase you need some liquidity to sort out one thing or the other. This prevents you from selling your XPolycub, thereby prevents you from paying the 50% penalty fee and also prevents you from selling to drive down the polycub price down.
I think it’s all making sense to me right now, the more I type the more I see the genius in the idea.
So how do I pay back my loan? This is the best part of the content, this is the million dollar question. Remember your XPolycub is staked in the collateralized lending contract, don’t forget it’s in XPolycub, so your incentives are still rolling in. The yields gotten from your XPolycub will be used to pay back your loan.
It’s like planting an Apple tree in Mr John’s Farm, then collecting 20 Apples from Mr John as a loan, so when your Apple tree starts bearing the Apple fruit, Mr John can take his 20 Apples he loaned you. All Mr John has to do is wait. If Mr John wanted loan interest, he can just pluck the interest from the tree.
Does this make sense to you now? I hope you understand how this works and start buying polycub and stake them to get more XPolycub. The XPolycub number will keep going up, never coming down. The earlier you buy, the better your chances of owning more XPOLYCUB.
Posted Using LeoFinance Beta
