Why Taking Quick Profits May Be a Bad Strategy for PolyCUB?
PolyCUB is almost here. Soon, very soon, now, who knows? But it's almost here and we can feel the excitement in the air for this launch and the airdrop.
People are getting ready for it. Think of strategies and make plans.
What we need to be very aware of is that CubFinance and PolyCUB are different so much so that they can almost be considered opposites.
The strategies that would have worked on CubFinance at launch and during the first few days in hindsight may prove to be completely wrong on PolyCUB.
CUB is an inflationist token, being printed at a rate of 1 CUB per block since early after launch. If I remember well, at launch it had a print rate of 3 or 4 CUB per block and soon after dropped to 2 CUB per block for another short while and then it dropped and remained at 1 CUB per block since. So, CUB was deflationist in the first month or so, but after that the print rate remained constant, and the circulating supply is kept under control through burns.
pCUB is deflationist. I'm not sure what will be the starting print rate, but Khal said the print rate halves every month until it goes to zero. When that happens, rewards will be distributed from the Protocol-Owned-Liquidity (POV) alone, which is expected to grow exponentially during the first few months after launch.
Up to this point, one could say there's still nothing that would limit quick profit taking in the early days of PolyCub.
But there's more.
On CubFinance there is a mechanism to distribute back to CUB holders in the kingdom a share of the 3% fee on rewards generated in the kingdoms, as BNB. To be honest, I haven't seen much from this mechanism, so I'm glad it's something else on PolyCub.
I don't remember the exact details, but on PolyCub instead of a small fee on rewards generated, there will be a huge penalty (50%) on early withdrawing (I believe it's about withdrawing from some bonded contracts, Khal will need to make another huge post explaining the full details, instead of hints in the AMAs - I already forgot the hints from earlier AMAs, apparently).
The fees collected from these penalties will go to those who prefer the long-term approach. There is a mechanism for that which involves something like staking.
I know my details are rather sketchy, but I draw these conclusions:
- early adopters will still earn the top rewards
- giving up 50% of the gains will make taking quick profits out less appealing
- if POV grows exponentially early on, it may reach the critical mass to allow the platform to keep rewarding perpetually while the fund keeps growing (and thus the rewards)
We need full details on PolyCub refreshed to be able to take the best decisions early on. At the same time, there are other factors. Will LeoBrige 3.0 be available at PolyCub launch or not? If not, other bridges need to be used, and most of them have a limited number of tokens supported (usually stablecoins). Certainly bLEO won't be one of them. Which means bLEO would need to be swapped for a supported token, if one wants to move LEO over to PolyCub.
While the APRs in the LPs depend on the liquidity and they will be higher before everyone storms in, it's still a matter of hours or days before things start to stabilize. So, it's not A LOT to gain, if one has the long-term perspective in mind.
Compared to CubFinance, on PolyCub there will be more time at the highest print rate. That is likely to coincide with many yield farmers joining to take advantage of the high yield on a new platform. They will be the ones to generate the most 50% penalties for early withdrawals, most likely. Which will go to long-term holders on PolyCUB (the exact mechanism how this happens will be known).
We've been in the block-start for a while waiting for the lights to turn on and then off for PolyCUB. After a few false starts, it looks we may have a real one very soon.
UPDATE: I'm adding a link to an older official post which Zoltan (@ph1102) shared in the comments. It contains lots of useful information, explained in a more precise manner than I did in my post:
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so far polycub has remained a bit of vague to me personally as there was a lot of talk, then it got postponed and I kind of forgot about it for a while until recently more news about soon and very soon came out. I started putting CUB in the kingdom again and now have a small bag there so at least I will get some polycub airdropped. I may add some more next week, depending on the news about polycub lol.
thanks for explaining a bit that I didn't know yet!
Well, my explanations weren't 100% documented, as that would mean going back through dozens of AMAs, so I relied on what I could remember. Possibly some information is not really accurate in my memory, that's why I preferred to keep it more general.
That's fine. And I didn't listen to all the videos either because that's just too time consuming :)
I still think I won't invest any extra funds into PolyCub. In a way, I think just waiting and watch how things play out before hand seems safer and the airdrop seems to be enough to get started on PolyCub.
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The airdrop will be split in 60 days period. Much like on Splinterlands, only a shorter period. I will be adding some LEO and some funds already on Polygon, but I won't move funds from CubFinance to PolyCub either.
This is true, but in the first 4 weeks, there will be still a lot of blocks spread out... Don't get me wrong, I'm not against it as we need more liquidity and that's the fastest way to distribute the tokens (except the airdrop)... Btw. this is from the official post
After that, we will have that monthly "halving" which should work out to push the price back up...
I do expect a lot of volatility, but as you said, the penalty will be the strongest "demotivator" of early cash-out... I will try to mix things up but leaving the majority IN for the long term... ;)
Thanks for sharing the screenshot. What official post is that? Did I miss something, or is it an older one?
It is possible to have a lot of volatility, mainly generated by yield farmers going in and out. From the airdrop there won't be any volatility, mainly because it's spread across 60 days and impact on liquidity every day will be significantly reduced, and the penalty will make many reserved in selling early.
It's the old one... When I first fomoed and bought MATIC... hahaha
https://leofinance.io/@leofinance/introducing-polycub-or-preparing-for-launch-tokenomics-airdrop-details-and-partnerships
Thanks for reminding me of it. It's what many might be looking for.
Way beyond my current level of blockchain knowledge. Inflationist, deflationist??? I keep reading and maybe 1 day it will click. Thanks for the info.
Inflationist means the tokens in circulation keeps expanding at a steady or increasing pace. If it's more than demand is for a token, its price will likely go down over time.
Deflationist means there's a limit to the total supply of tokens. Bitcoin is also deflationist. The way both bitcoin and pCUB put a cap on the total supply is by halving the print rate of the token. Bitcoin every four years, pCUB every month (after the first month, because during the first month it's weekly, from what Zoltan shared in the comments). A deflationist token also means that its price should keep rising with demand, when no more or very few tokens will be printed. That happened to bitcoin since launch, but it doesn't mean another deflationist token will do the same. There needs to be demand for it, more than offer.
Still can't see beyond a highly structured ponzi scheme, sorry. There is zero utility atm, IMHO.
I can understand the original AMMs on each chain, some evolution AMMs that can include cross-chain bridges, or incentivized LPs of gaming tokens to create liquidity (Katana pools in Ronin , Mobox internal pools or DEC pools for Splinterlands)
But this... AAVE, Sushi, 1Inch, Cake, Goose, Curve, ApeSwap, Autofarm... There are just enough, IMHO.
Happy to be proven wrong, ofc, not looking to be trollish or disrespectful. Just my impression. Heck, even CUB has more sense almost one year ago. But now? Are we going to be talking also another 6 months when we port Cub to Terra ecosystem (which is something that would happen eventually)? Port to Avalanche? Cardano? etc etc? What are the specific and tangible profits? No tokenomics wizardry. I mean profits. Money going from one protocol/system to Cub coffers. What is the point?
Sorry for the rant.
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Personally I see CubFinance as the home base of these LeoFinance defi ops. And I won't venture too much in additional launches unless I really like the model and the blockchain where it's launched.
Benefits to CubFinance (and to some degree Leofinance atm) are the following, in my opinion:
I think that you hit the nail on the head. Those in it to make a quick buck might miss out on a lot more slow bucks.
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Well, a 50% penalty on gains for early withdrawing would likely deter many from going this route.
There are so many different tokens, people can't focus on them all which is why i decided to focus on community instead.
Seems like you got a handle on it though good luck to you
@gadrian
That's a fair point. Many times I bang my head against the wall trying to keep up, so you might be the one who took the better road.
We are all just finding our way
@gadrian have the best day and new month ahead mate
😎
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i do not see polycub doing better than cuddefi but the crypto space is a world of possibility and anything can happen
I still see cubdefi as the home base for LeoFinance defi ops, and I will act as such. But since I already have some funds on Polygon currently doing nothing, I don't see why not moving them on a platform I trust.
You forgot one of the most important factors. Hype a project always has a lot of buz and hype from investors getting in etc and it starts to phase out after a few days. This goes with anything in marketing or really life.
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You might be right. But there are still some factors. How much will the price go up because of the hype, how well do the polygon nodes work if one wants to take out some profits. The fact that the airdrop is spread across 60 days in combination with the hype, may create some interesting volatility.
I'm so lost with this stuff...What would you suggest is the best starting point to learn about PolyBub and how CUB holders will benefit?
Any idiots guide to it around?
I don't know one. That's a problem. All I know is what I remember from listening to AMAs over time.
Jon, check out my discussion with Zoltan on this post. He shared an older official post, but it contains lots of useful information. I had forgotten about it.
CUB and pCUB are longterm plays for me, so patience is on my side... let them go on to mature from cubs to lions ;)
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You seem to be decided on how you want to play it, which is way off better than going in without a plan.
Very thorough thread on why Polycub is different. Nice job informing on different features of this new exciting cryptocurrency !
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Thanks! I'm pretty sure there will be more such posts as we approach the launch.
the waiting... the waiting.... I am a shrimp so my little bit of CUB won't make me much, but I am just super interested in the learning side, and can't help but support projects from this community :)
1 CUB at a time. :)