There is a tightening in the crypto space. We're seeing a consolidation of altcoins - much like we did in 2018 - the ones that survive this crypto winter will also be the ones who thrive. We're moving into a world of sustainability and technology. As such, those will be our focus going forward.
LeoFinance has always prided itself on building for the long-term. We're not here for quick hits and short-term gains. Everything you see around you here in LeoFinance's Web3 Ecosystem is designed to pay off massively in the long-run.
When PolyCUB launched, our theory was largely around building a sustainable Yield Optimizer that could pull yield from external platforms via Kingdoms. Kingdoms offered PolyCUB one method of Value Accrual: a 10% management fee on yield generated from Total Value Locked.
We quickly realized that this model did not provide us enough sustainability. The Kingdoms model generates revenue, but it doesn't generate enough revenue for the PolyCUB Protocol.
This is when we went back to the drawing board. Looking at different models for sustainability - ways to generate massive amounts of incoming revenues for the PolyCUB Protocol.
After-all, if we could solve the revenue problem, then we would solve our larger ambition: become the most sustainable Yield Platform in DeFi.
This all culminates to an important moment: the raising of on-chain HBD staking from 12% APR to 20% APR.
We had discussed adding HBD and Hive to CUB/POLYCUB for a long-time. The community has requested it since the beginning of CUB - about 14 months ago.
The on-chain staking rate being raised to 20% APR offered us a glimpse into what could be the future of CUB and PolyCUB: the multi-token bridge theory.
Multi-Token Bridge Theory
Our theory began with pHBD. We saw an opportunity with pHBD: HBD lacks liquidity and in fact, there is no deep liquidity pool for HBD on any blockchain.
As it stands, the pHBD pool has over $450k in liquidity and frequently trades over $50k USD in a single 24 hour trading session.
The launch of pHBD was highly successful and the pHBD-USDC pool continues to gain liquidity on a daily basis.
pHBD generates 4 main sources of value accrual:
- HBD - held as 1:1 collateral for the wrapped equivalent - staked on native platform (HBD on-chain savings) = value accrual for PolyCUB's PoL
- HBD - 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- HBD cross-chain arbitrage = value accrual for PolyCUB's PoL
- pHBD-USDC holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive the pHBD-USDC vault yield higher
When you compare these 4 methods of value accrual to that of Kingdoms, things got pretty wild. pHBD was generating more revenue for the PolyCUB Protocol in the first week of release than all of PolyCUB's Kingdoms... Combined AND at the peak of their TVL (~$6M).
This discovery led us down a rabbit hole... What if every vault on PolyCUB was designed to have these 4 methods of value accrual? What if we paired all those vaults to POLYCUB and actually added a 5th method of value accrual?
Would this turn PolyCUB's tokenomic structure into something that resembled that of Thorchain? Where POLYCUB is the base asset that every other asset is paired to and thus, as more TVL gets deployed into the vaults, the POLYCUB trading liquidity rises exponentially?
These are the questions we began asking ourselves when pHBD launched. The models we mapped out and the theory was continuing to prove worthwhile. We decided to push on and in the last 2 weeks, we've launched pHIVE and pSPS.
14 New Sources of Value Accrual for PolyCUB
With the multi-token bridge now in place, we've launched pHBD, pHIVE and pSPS. This is just the beginning of what's to come. The vaults on PolyCUB now generate massive levels of Value Accrual. The key now is to get liquidity into these vaults.
As the liquidity on these vaults continues to rise, we see massively important effects on PolyCUB. Value Accrual is the most obvious effect but we also see that every $1 that gets LP'd on the platform = $1 more in trading liquidity for POLYCUB, since every asset is paired to POLYCUB itself.
Our vision for the future of POLYCUB and CUB is a future where all of these vaults are continuously growing in terms of TVL. As they grow in TVL, the Value Accrual they bring into the protocol rises. As that Value Accrual rises, so does the POLYCUB price. As the POLYCUB price rises, more TVL enters the vaults (higher APYs). As more TVL enters the vaults, more $$ are available for POLYCUB trading (since everything is paired with POLYCUB).
This is the ultimate self-perpetuating economy. Every $1 that moves in or out of the platform is valuable for the platform via wrapping fees, deposit fees, trading fees, arbitrage, liquidity for POLYCUB, collateral staked on native platforms and to tie it all together: governance to control platform mechanics and where yield is driven.
Thank @edicted for continually beating the drum of efficient capital. POLYCUB's capital model in the beginning was inefficient - paying yield for a measly 10% management fee. POLYCUB's capital model today is highly efficient: every $1 that is paid out is paid to capital that is generating multiple sources of value accrual for the PolyCUB Economy:
- HBD - held as 1:1 collateral for the wrapped equivalent - staked on native platform (HBD on-chain savings) = value accrual for PolyCUB's PoL
- HBD - 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- HBD cross-chain arbitrage = value accrual for PolyCUB's PoL
- pHBD-USDC holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive the pHBD-USDC vault yield higher
- pHIVE - held as 1:1 collateral for the wrapped equivalent - staked on native platform (HIVE POWER) = value accrual for PolyCUB's PoL
- pHIVE 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- pHIVE cross-chain arbitrage = value accrual for PolyCUB's PoL
- pHIVE-POLYCUB = utility for people to buy POLYCUB to LP against their pHIVE = value accrual for PolyCUB's PoL
- pHIVE-POLYCUB holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive pHIVE-POLYCUB vault yield higher
- pSPS - held as 1:1 collateral for the wrapped equivalent - staked on native platform (Splinterlands) = value accrual for PolyCUB's PoL
- pSPS 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- pSPS cross-chain arbitrage = value accrual for PolyCUB's PoL
- pSPS-POLYCUB = utility for people to buy POLYCUB to LP against their pSPS = value accrual for PolyCUB's PoL
- pSPS-POLYCUB holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive pSPS-POLYCUB vault yield higher
Targets for May
Our goals for PolyCUB are much clearer now. TVL in these "V2 Vaults" is the most important thing we can strive for. As TVL in these "V2 Vaults" rises, more capital flows through the above 14 methods of value accrual, which ultimately leads to a world where the Multi-Token Bridge is generating tens of thousands of dollars per month, buying POLYCUB and distributing that POLYCUB as LP Rewards to anyone in the Vaults.
- pHBD-USDC: $500k in liquidity
- pHIVE-POLYCUB: $100k in liquidity
- pSPS-POLYCUB: $100k in liquidity
Targets for June:
- pHBD-USDC: $750k in liquidity
- pHIVE-POLYCUB: $200k in liquidity
- pSPS-POLYCUB: $200k in liquidity
We can achieve this together, 🦁s. Every $1 in TVL that we generate toward these targets makes a massive difference for POLYCUB. With future halvenings, the ability to earn POLYCUB will become much more difficult.
In the next few months, the only way to earn POLYCUB will be through the buyback and redistribution of value accrual from the above 14 methods (+ any other V2 vaults we add between now and then). This means that the Protocol will need to buy tens of thousands of $$ worth of POLYCUB each month.
POLYCUB is designed to function like BTC from a price perspective: a high degree of scarcity meets deep utility and creates a dynamic where the price always rises over long timeframes. POLYCUB may be $0.15 now, but the limited 7M tokens that will ever be minted will always rise in value over long timeframes.
With each vault paired against POLYCUB, this also means that every vault will also rise in TVL over time. Leading to exponentially more value accrual and a self-perpetuating economy of LP Earnings via the 14 methods of value accrual.
Our goal is to build the most sustainable DeFi application in the world. It starts with the Multi-Token Bridge Theory. Let's make this a reality by hitting our May Targets.
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage and share content on the blockchain while earning cryptocurrency rewards.
Our mission is to put Web3 in the palm of your hands.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
LeoMobile (IOS): https://testflight.apple.com/join/cskYPK1a
LeoMobile (Android): https://play.google.com/store/apps/details?id=io.leofi.mobile
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
Polygon HBD (pHBD): https://wleo.io/hbd
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
LEO Wrapping Bridge: https://wleo.io