HBD Savings vs bHBD-BUSD on CubFinance (Pros & Cons)

avatar

CubFinance.png

The deployment of bHBD on CubFinance brought some dilemma to me personally whether I was going to hop on the wagon or not. It had been for a while until I decided to go for it 19 days ago.

And here's a comparison between HBD Savings and providing liquidity in the bHBD-BUSD CubFinance pool.

Keeping HBD on Savings (on-chain)

Pros:

  • Fixed interest at 20% APR and the yield is in the form of HBD.
  • Interest earned can be compounded every 30 days.
  • Safer since the HBD stays on-chain. No exposure to any third party risk.
  • No transaction fees for transferring HBD into the Savings vault and withdrawing it.

Cons:

  • Withdrawal period takes 3 days, hence:
    • HBD is not easily accessible and or available anytime.
    • During HBD price pump, one cannot take advantage of such to make some profits.
  • Keeping HBD on savings doesn't help in the liquidity of the coin.
  • Earnings are only claimable or harvested after 30 days.

Pooling into bHBD-BUSD on CubFinance

Pros:

  • Higher APY (at the time of this writing).
  • HBD is readily available, can withdraw anytime.
    • No waiting and one can take advantage of price actions (HBD mini-pumps or $HIVE price dump).
  • Helps in the liquidity of HBD off-chain.
  • Yields have no lockup period so they can be harvested, traded or staked anytime).
  • Almost minimal impermanent loss because HBD and BUSD are both stable-ish coins.

Cons:

  • Volatile yield, APY changes anytime and amount or value of earnings are entirely dependent on the price of $CUB.
  • Have 0.25% wrapping and unwrapping fees when bridging through the Multi-Token Bridge from Hive to Binance Smart Chain and vice versa.

Personal Experience

19 days ago, I pooled $200 into the bHBD-BUSD farm on CubFinance. Today, I harvested over 200CUB which I decided to sell for this personal experiment. It gave me 5.34 HBD (an average yield of 0.28 HBD/day).

Putting the 200 HBD into Savings at 20% APR would yield approximately 0.11 HBD/day or about 2.11 HBD in 19 days.

From that personal experience, I can say that my yield on CubFinance is higher (more than double) compared to putting it into HBD Savings. Even when we factor in the transaction fees. But the opposite may happen if the price of CUB and the APY on the liquidity pool drop significantly. And that's obviously one of the risks to be considered too.

Conclusion

Taking advantage of these opportunities or products depends on one's goal and risk appetite in investing. A conservative and risk-averse individual might as well opt for the HBD Savings, considering the disadvantages of such.

As always, none of these are to be considered as financial or investment advice. DYOR.


Lead image created on Canva. Logo/s from within LeoVerse. No copyright infringement intended. 091022/22:00ph

Posted Using LeoFinance Beta

cubfinance bsc defi hbdsavings bhbd-busd liquiditypool ctp pob leofinance
0
0
0.000
9 comments
avatar

What about Impermanent Loss if you would liquidate your LP position right now...? I don't think you would end up with the same amounts, thus you need to factor that in as well.

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

Yes you are right about that. Since they are both stable-ish coins, the IL is at least minimized unless one of them break away from its peg.

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

Even though HBD does slightly fluctuate around its peg, the fact that you're earning 30% makes any slight impermanent loss in the bHBD:BUSD LP a non-issue.

And remember we always have the backstop of being able to withdraw the bHBD back to native HBD and using the blockchain to convert to $1 worth of HIVE ;)

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

Thanks for sharing your personal experience.

When you're playing with relatively small amounts like this, I think pooling your stablecoins on CUB for higher yields is the best option.

As you've pointed out, you expose yourself to some third party risks when you wrap.

But the potential rewards are just too juicy to ignore.

(Hopefully not famous last words there haha)

Posted Using LeoFinance Beta

0
0
0.000
Reply
avatar

Pleasure. And yep, playing small to test the waters, lol! And true, the reward is quite juicy this time. Don't know though in the coming days when more people pool in, the APY will drop for sure and hopefully CUB price will hold too. Although it would be good to just stack them up coz we never know, with the CUB burning and all.

Posted Using LeoFinance Beta

0
0
0.000
Reply