PolyCub Scarcity and value enhancement
As I read and digest more of the tokenomics of PolyCub I develop more appreciation for it's novel traits. PolyCub token appears to be a unique hybrid, which borrows advantageous traits from other successful defi projects. This post highlights four deflationary and value enhancing features of the token, as I understand them:
- Bitcoin-like halving or deflationary minting schedule
- Project owned liquidity capturing and permanently removing PolyCub tokens from circulation.
- Project owned assets for asset backed token value
- xPolyCub staking vault which captures and removes PolyCub tokens from circulation not permanently, but incentivizes longterm staking.
All these are designed to increase value.
Bitcoin like halving or deflationary tokenomics
- The token has a regularly scheduled reduction in the minting of PolyCub, similar to the reducing minting of Bitcoin known as the Bitcoin halving.
- But the rate of halving for PolyCub is much more frequent, and produces a more rapid reduction in the first year of PolyCub then several years of Bitcoin.
Project Owned Liquidity
- Project Owned Liquidity means the defi project software is programmed to sell newly minted PolyCub at a discount in exchange for liquidity provider tokens.
- This is novel, as investors deposit for example PolyCub and USDC into Liquidity pairs to earn Liquidity Provider tokens, which can be deposited into the PolyCub-USDC farm or be used to purchase PolyCub tokens at a discount of for example 10%. Which is an immediate 10% return on investment, which the investor can repeat as often as it is profitable.
- Additionally, this exchange of new PolyCub for liquidity provider tokens permanently locks up the LP tokens in the farm, and also removes the liquidity pair assets PolyCub and USDC permanently from circulation. This contributes to PolyCub token scarcity, and theoretically enhances it's value.
- Thus investors can potentially perform continuous arbitrage, and the protocol creates a loop which builds protocol owned liquidity continuously, and thus a continuous stream of PolyCub is earned by the protocol from the Farm.
- This is the PolyCub Protocol continuous bonding loop:
- buy liquidity tokens,
- deposit in farms to earn PolyCub,
- sell earned PolyCub to buy Liquidity tokens,
- deposit in farms to earn PolyCub,
- Repeat
- buy liquidity tokens,
- deposit in farms to earn PolyCub,
- sell earned PolyCub to buy Liquidity tokens,
- deposit in farms to earn PolyCub, repeat.
Project owned assets
- Additionally, project owned liquidity also creates something called project owned assets which are in addition to the project owned PolyCub, the other matched pair assets like USDC and Ethereum.
- This creates another basis for project token value based on the asset owned model of stock valuation which allows the value of the assets owned by the protocol, in the project owned liquidity (PolyCub, Ethereum and USDC) to be used as a basis for the value of PolyCub. So the more PolyCub, USDC and Ethereum the protocol owns as protocol owned liquidity, the higher the valuation of PolyCub is technaically calculated to be. This valuation mechanism is used in determining the value of company issued stock on the US Stock exchanges, and most other stock exchanges globally. So since PolyCub is the issuance of the Protocol PolyCub, it's token can be valued like a stock.
xPolyCub tokens representing larger amounts of staked PolyCub.
- A surprising component of the new PolyCub project is the xPolyCub Staking Vault, which represents staking of PolyCub with a 1000% APR at the project's start, and now 730% APR at the time of this writing. Which is removing vast amounts of PolyCub from circulation due to such large APRs in a staking environment with no risk of impermanent loss.
- Additionally stakers are further rewarded with the Lion's share of the 50% rewards penalties levied against investors in the 2000% APR farms PolyCub-USDC and PolyCub-ETH who claim their PolyCub before the ""X-Block**, which I believe is 90 days out.
- The high Farming APRs attract a vast amount of PolyCub to be locked up in liquidity pairs, and the large staking rewards of xPolyCUb attract large amounts of PolyCub tied up in staking.
- These twin incentives further contribute to token scarcity by removing PolyCub from active circulation.
Summary
PolyCub token appears to be a unique hybrid, which borrows advantageous traits from other successful defi projects. This post highlighted four deflationary and value enhancing features of the token, as I understand them:
- Bitcoin-like halving or deflationary minting schedule
- Project owned liquidity capturing and permanently removing PolyCub tokens from circulation.
- Project owned assets for asset backed token value
- xPolyCub staking vault which captures and removes PolyCub tokens from circulation not permanently, but incentivizes longterm staking.
PolyCub is a unique hybrid and thus it is like a new creation, like a flying tiger.
So perhaps the feature writer for Cointelegraph was right in his description of PolyCub as DeFi 2.0.
PolyCub is a bold new creation, and we will see if this hybrid will grab the future of decentralized finance by the reins, like a rider grabs the reins of a horse, and ride off into battle and victory.
Ride forward PolyCub, the future belong to the bold.
