Yep, I'm still on that CUB train.
CHOO CHOO!
Looking at everything going on with CUB it's hard to keep my eyes from being glued to the screen. Waking up in the morning and harvesting 300 CUB that appeared out of nowhere while I slept has that effect apparently.
There are many many people still on the sidelines waiting for the dust to clear. The Lions have landed on BSC!
Certik audit
Apparently our code is being audited. Once we are in the clear there and start getting listed on the data aggregators and such, more people from the BSC ecosystem will feel comfortable joining us.
Utility
The CUB/LEO/HIVE ecosystem is the ultimate yield farm. We develop faster. We give more money away. We take less money for ourselves. People are noticing. This is good for everyone.
Synergy
This snowball hasn't even gotten started yet, but many are worried that the party will be over when yields get reduced from lowered inflation. I'm pretty sure the exact opposite thing is going to happen.
Inflation schedule
We have 3 days of farming at maximum capacity. On Monday inflation will be reduced from 3 CUB per block to 2. I'm sure many are worried about the reduction. There may be even a speculative FUD dump.
However, with this much utility, demand, development, hype, and sidelined investors, truly the only place the price can go is up during an inflation crunch. It doesn't matter that yield will drop. Leofinance apes like me don't care. We are farming, not trying to speculate on the short-term ups and downs. Leave that to the day trading clowns. Thanks for the PancakeSwap farm, friends.
To think that some death-spiral scenario is going to happen at this point is ridiculous. Yields might not actually even go down. The price of CUB determines APR yield in many cases.
Looking at the CUB DEN, what happens to APR if USD price goes up but inflation goes down? Say I had 100 CUB valued at $5 per CUB: $500. The price doubles to $1000, but the inflation gets cut in half. Assuming the inflation was 5% a day, cut to 2.5% a day, what do we get? 5% a day on $500 is the same as 2.5% a day on $1000: $25 a day. We see that if we measure APR yield in terms of USD, there was no change in terms of USD earned, but the APR was still cut in half because the principal collateral doubled in value.
In this case the price going up didn't matter because the collateral held was 100% CUB. A reduction of inflation is going to directly correlate to a reduction in APR. Reduce inflation by half will reduce APR exactly by half because we are measuring APR in terms of collateral vs CUB gains, and the collateral is 100% CUB. Of course no one cares that APR went down because their CUB bag just doubled in value instantly.
Double bluff
But USD is the unit-of-account we use, so of course we measure APR gains in USD because that's the "stable" way of measuring these things. So absolutely: higher token price increases USD yield for CUB holders (but not CUB yield).
This math is getting very weird because I'm more interested in farming maximum CUB than farming max USD.
Moving on.
It gets even more complex when we look at the other pools. Take my main squeeze for example: the CUB/BUSD pool. Imagine if this pool gets pumped by someone doubling the amount of BSUD in the pool. This would take the price of CUB to x4, because half of the CUB would be removed from the pool, while BUSD would double, for a multiplier ratio of x4:1.
Okay, so in this simulation lets say it's March 22nd. CUB inflation has been cut down to 1/3 (1 CUB per block from 3). However, at the same time CUB goes x4 to $20.
This means I'm going to get hit pretty hard by impermanent loss. My value is in the LP pool, and half of my CUB is going to be taken from me, replaced with BUSD from the other side of the trade.
- I had 3000 CUB and 15000 BUSD before the x4.
- Afterwards I have 1500 CUB and 30000 BUSD.
- Suffer $15k from impermanent loss ($75000 to $60000 slippage).
- This is because I was selling CUB via algorithm as it spiked.
- If I had held all the CUB in the DEN I'd have $120k (yikes).
On top of that shitshow, my yield has gone down because only 1 CUB per block is being generated. Say I go from farming 6% a day to 2%. Of course this is being measured in CUB. Now we have to convert that 2% to USD APR to see the actual returns. Is the farm still worth it?
At 6% yield per day at $5 CUB and $30k collateral, I was generating 360 CUB a day ($1800). However, at 2% yield per day (120 CUB) with $20 CUB with $60k collateral, I would be generating $2400 a day. Score... Inflation was drastically reduced but my yield is still even higher than before.
Is it worth it?
Is it worth it to hold half of your value in BUSD and suffer impermanent loss when you "know for a fact" that CUB is going to $20? LOL, of course not. But we don't "know", do we? And a spike to $20 will almost certainly create some kind of panic dump. Or not, who knows. That's why the BUSD pool is such a safe option. We're hedged in every direction.
I have a pretty good idea.
Let's look at another pool, shall we?
Now this is the most interesting pool in my opinion. Only a 2% deposit fee instead of 4%. More importantly, what happens to APR if inflation gets reduced? APR will also be reduced, unless users exit the pool because they feel it's no longer worth it (lol@1761% not being "worth it" but you get the idea, it will drop hard).
So let's say competition increases, the APR here drops to 1500%, and then inflation gets slashed and it drops to 500%. For good measure we can expect competition to increase even more because even 500% APR is insanely high. Now it's 250%.
HOWEVER!
Because the collateral here is not being measured in CUB, what happens when the price of CUB goes up? The APR actually increases by the exact same amount. So if the APR was 250% and CUB magically goes x4, the APR is gonna go x4 instantly as well, luring even more people into this pool (and all the other pools that don't require CUB collateral, which is 19 out of the 22 farms).
This in turn creates another supply crunch, because 18 out of 22 pools charge the 4% deposit fee to enter them. All that money is using to buy and burn CUB (80%) and bLEO (20%). Winning.
Ultimate positive reinforcement loops.
So if CUB does start pumping, the main pools are going to look like worse and worse of a deal because the underlying collateral used to calculate APR is going to be much bigger, and the inflation is going to be reduced. Meanwhile, the APR on all other 19 pools is going to skyrocket, bringing in the entire BSC network for the ultimate farm party, each of them getting charged 4% to ape in.
Yield reduction FUD
There are a lot of people on the sidelines right now. Audits need to be completed. Khal has to prove himself all over again to an entirely new network, but he doesn't have to prove himself to me: I am IN! And so is most of the rest of the core LEO group, even with that very small airdrop.
Supply is going to be crunched. It's important to note that LEO supply is also being crunched on Uniswap.
A month ago the wLEO pool had over 1.1M wLEO in it. Now we only have 755k, and the amount of ETH in the pool hasn't really changed at all. Lots of big players removed liquidity and plopped it right into CUB, and the price of LEO went UP... do you realize how insane that is? Everything is synergizing during a mega-bubble year.
To be fair I know exactly where those 350k LEO went. The bLEO/BNB pool on CUB is worth over $700k... found it, boss! All of these developments are just creating demand for everything.
Hive?
Yeah, all of this is amazing for Hive. Maybe not right now in the short-term, but hot damn lots of BSC ppl gonna start looking into LEO, creating a lite HIVE account, and exploring the options from there. We have a lot to offer.
Also apparently there is a leasing/lending dapp launching very soon. This is only going to increase demand for CUB/LEO and make people realize what a gold mine this is.
I'm not even shilling.
Seriously I'm not trying to get people hyped or telling people to buy or anything. This is very risky stuff, but the way I see it there is infinite upside and very little downside considering all the variables.
You know what's not risky?
Farming CUB with a stable coin with 1000% APR. lol... That's the thing. These defi farms are always pumping like this in the beginning, but then they can die quite easily. The longer we keep all this momentum going, the more people on the outside are going to realize what a crazy opportunity this is.
How high of an APR do we need to maintain to get people excited about CUB? 50%? 25%? A sustained 25% gain per year on a stable coin is absolutely legendary. Try to get that on a bank account. CUB can make it happen.
Plenty of these farms have done well even with the deposit fees going directly to the devs and spent on hookers and blow. We are taking those funds solely for the purpose of pumping the price and keeping this momentum going. The energy behind this project is simply massive and can not be ignored.
Inflation reduction is bullish, not bearish.
How did people forget this? It's 2021: the mega-bubble year? Why is it the Mega-bubble year? Because Bitcoin's inflation was cut in half May 2020. Welcome to the party.
So of course when CUB inflation gets slashed the price of coins is going to go up. Less dumping, more buying. High liquidity, deep pockets have incentive to move in and HODL or simply farm from the outside.
What happens if other cryptos spike?
This is the mega-bubble year. It would be foolish to assume that other tokens are going to stay stagnant. The collateral in the CUB farms will increase in value, and the APR will appear to get worse. That's why the stable-coin pools are legit: the APR on stable-coin farms will just go up up up during the bull run when everything is mooning except for USD.
New strats.
There's a reason why the CUB/BUSD & CUB/BNB pools are so heavily incentivized. If CUB spikes users will suffer massive impermanent loss because their coins are being sold.
Sure, the yields are good, but given what I'm seeing in terms of development, adoption, and blind speculation/hype... I'm looking to take more of a HODL position in this market.
Of course the drop from 3 to 2 CUB (33% drop) is not as bad as 2 to 1 (50% drop). Hopefully we get some kind of idea of what's going to happen next week during the first inflation reduction.
Conclusion
I have a lot to think about, but I think during these extremely uncertain times the CUB/BUSD pool is still the safest hedge in both directions. However, with all these mechanics in play and potentially new DEFI applications being added to the protocol soon, it's really hard to have my CUB up for sale in the LP pool. I thought I was bullish before... but the more I look at all these variables the more upside I see.
When it really comes down to it, I think a lot of people (including LEO/CUB bulls) are still massively underestimating what we have going here. The timing is perfect. New applications will be added to the protocol over the coming weeks/months. Other users on BSC gonna jump in when we sustain good ROI levels. The snowball effect of buy & burns hasn't even started yet because inflation is too high (10 days left on hyperinflation). Wait and see.
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