Looking Beyond the PolyCUB Investment

PolyCUB is the De-Fi platform on Polygon Network where you can be rewarded with a deflationary token while receiving juicy APR for your liquidity. Similar to Bitcoin, the token has halving periods when the emission rate is cut by half. As of writing, the emission rate is 0.125 per block.

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I run an experiment for PolyCUB platform that is based on highlighting the return of investment for someone who re-invests his earnings regularly. So far we've had some promising weeks in which we were too close to the break-even but some weeks were harsh in crypto which made it harder.

Let's talk about the reasons behind the performance of PolyCUB token.

PolyCUB amidst Bear Market!

The situation of crypto market is pretty obvious. The market has been pretty depressing and the market conditions hit the projects unmercifully.

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Look at the weekly chart of Bitcoin. It seems like ShibaDogeInuFloki... token but it is the leading cryptocurrency of crypto market.

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In the same way, the price actions of PolyCUB in the bear market. $0.13 was the strongest support line of PolyCUB but the conditions have been too severe for a new-born project to resist the FUD in crypto, tension in the global and the inflation all around the world.

$0.13 to be Support Again

There is a working Protocol-owned Liquidity that buys-back the token from the liquidity pool. Yet, when the sell-pressure outperforms it, we see the drop like in the chart.

According to our recent investment reports, Break-Even was too close in last month and $0.30 PolyCUB would turn many investors bags into green with a nice return.

Now PolyCUB is traded for $0.10 in the market. However, the volume is incredibly low.

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Total $64K Liquidity and $3k daily volume cannot be a guide for investors to make their decisions. Similar to USDC Pool, the WETH pool has $1.9k daily volume! Pretty low to be relied on.

Note: For W20 & W21 - Net Gains of Investment is around -$250
WHY? 👇

The Beauty & The Ugly

The beauty of the platform is obviously the hard-working developers of LeoFinance and the strong community behind it. There is still $2M TVL on the platform that is a decent number in crypto bear market. It makes PolyCUB around 50th - 55th highest TVL on Polygon according to DefiLlama. Do not forget the fact that it is getting harder to find liquid PolyCUB each month.

The ugly side is directly related to the overall crypto market conditions and "different" outcomes of deflationary nature of the token. I think we do not need to discuss the situation of crypto market or the global factors. Let's discuss the deflationary mechanism.

In the case when the token is traded for the same price, the deflationary nature will decrease the APR of Farms when the emission is cut by half. There are threats on crypto that creates sell-pressure + deflationary token required more buy-pressure to find a balance. Yet, PoL is not limitless! So, the price dropped.

Suffer in the Short-run

The inflationary De-Fi tokens have a mutual fade with the previous examples. They will be left-out the moment the whales find a better option. At that point, "high APR via high emission" does not make any sense.

The recent product of vex-PolyCUB locked thousands of dollars that will be the fuel of buy-pressure for the decreasing number of liquid tokens in the market! Basically, the buy-back will start to outperform after the equilibrium.

It has never been a short-term investment for me. Otherwise, I would not lock my tokens for 2 years. I'm not concerned about the local price actions; re-investment will happen non-stop as before 🦁

Posted Using LeoFinance Beta



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