CubFinance: Compounding Strategies To Maximize Your Income

flauwy (74)in LeoFinance • 3 years ago (edited)

After two days on CubFinance, a lot of money was made, many mistakes were done and FUD and FOMO proponents over the CUB price are battling each other on the LeoFinance Discord, which is more active and with more members than ever. We have crossed over 7 million USD total value locked (TVL) and APR rates are dropping with more and more liquidity entering the farms and dens. While some are sitting on unbelievable gains, most people are still figuring out what this is all about and how they can participate. Here are a few strategies and thoughts for you.

The Cub Token

Let's begin with a closer look at the CUB token, that is issued as a reward for your activity and liquidity provided on CubFinance. All payouts are done in CUB exclusively. While the initial supply was incredibly thin, which pushed up the price of the CUB token, the inflation is high and the airdrop still upcoming. This makes the current valuation of CUB very volatile.

Cub Tokenomics

CUB is a BEP20 token and hence runs on the Binance Smart Chain (BSC).
CUB has an unlimited max supply.
There was no initial presale
There is an ongoing Airdrop of 28,000 CUB on Hive Engine (already included in the shown total supply of CUB, read more):
- Anyone can buy or sell CUB and then wrap it onto BSC
- The wrapping bridge will have its own UI to allow you to send HE CUB to BEP20 CUB
- The bridge will only work one way (no unwraps from BEP20 CUB to HE CUB)
- The bridge will last for 7 days. After that, wrapping CUB will be impossible. Airdrops must be claimed within 7 days of the initial drop. After that, HE CUB will no longer be utilized in any way, shape or form
CUB has a large inflation rate:
- Week 1: 3 tokens / block (BSC has a ~3 second block time)
- Week 2: 2 tokens / block
- Week 3: 1 tokens / block (from there on probably a constant; anyone?)
80% of all the fees generated on CubFinance are used to buy and burn CUB (the other 20% do the same with LEO).
There will be CUB long-term staking, starting in Q2 2021
Governance and further use-cases are being developed

Yield Farming Strategies

Of course, making massive gains and getting the most out of the CubFinance is the ultimate goal. But there are many different ways to play the game, involving different risks and rewards.

General Strategies

There are many ways to approach CubFinance. Here are a few of the strategies I have picked up on Discord from other lions.

Dens

Some will do the least risky strategy and simply stake their tokens like BTC, ETH and so on in DENs, which will bring constant but lower rewards. This will allow them to ride the wave of the bull-market, when these tokens go up, without risking impermanent loss in the farms or even swapping them to something else and miss their tokens appreciation entirely.

Wide Spread

Others will spread themselves to as many farms and dens as possible, to tap into all the various markets and do a risk/cost/gain average. They can take profit here and there, when markets fluctuate and compound with others that sit tight.

Stable-Coins

Pooling stable-coins against stable-coins, using the USDT-BUSD farm, the DAI-BUSD farm and the USDC-BUSD farm, will create a constant cash flow, while having the least risk with basically no volatility at all. This strategy is also a great hedge against market dips or even a general bear market and provides liquidity to buy the dip (or a lunch).

My Strategy For bLEO

I am mostly interested in keeping and earning more LEO, which is the Lion King among HIVE tribes, the father of CUB and the native token of the greater LeoFinance ecosystem. The general strategy of its founder @khaleelkazi is to amplify the value of LEO with more and more different apps, tokens and services, that all feed the great lion. I do like that strategy very much. Airdrops like CUB or the upcoming ProjectBlank will all benefit LEO stake holders, which is free money for great new projects.

Also, LEO creates constantly new income through curation and the WLEO liquidity pool. Further, the supply of LEO is already very thin and probably continues to shrink, despite its inflation, due to growing demand and the ongoing burning of LEO with the LeoFinance ad income and the new CubFinance fee burning system.

On CubFinance we got the bLEO-BNB farm. It has currently the third highest multiplier of 12x and is hence the best rewarded farm that does not require the CUB token as one of its pair. Although I am not interested in holding the BNB token, it has performed incredibly well recently and I think the demand for Binance Smart Chain DeFi (or should we call it actually CeFi?) will likely keep up for a while.

When new farms with bLEO-BUSD and other bLEO pairs come out, I will likely spread my funds out between them. Additional bLEO farms like these are already announced and will include new incentives to pool with them. I am not too worried about impermanent loss, considering the high rewards.

This is why I have the majority of my liquidity pooled in the bLEO-BNB farm!

My Strategy For CUB

Although I am mostly interested in LEO, I am generally interested in expanding my influence in the greater LEO ecosystem. This is why I am very interested in growing a stake of CUB. After taking a little bit of profit with my first harvested CUBs, to earn back my deposit fees and general costs of moving my funds onto the Binance Smart Chain, I am now accumulating CUB. As we learned above, the large inflation will drop quickly by 33% in the second week and another 33% from the third week onwards. So the time to earn CUB is NOW.

Even though there is no max supply and inflation will still be pretty high after the third week, people will very likely continue to hold and accumulate CUB, to earn more yield with it and to speculate on the LeoFinance team to deliver more epic stuff as always and bring more and more value to the token. Unlike with other yield farms, we have a large and strong community of hodlers behind LEO and CUB.

It took a year for LEO to show its full strength. I doubt it will take that long for CUB.

That being said, I have no idea how to value the CUB token. The tokenomics seem a bit crazy but then again, when we look at other similar coins lake CAKE (and CubFinance is a clone of Pancake Swap), this seem to actually work. And I honestly believe that CubFinance will grow into a much more advanced platform than any of its direct competitors. But since the token price is uncertain, I will not speculate on it and buy it directly.

Instead, I am concentrating on earning CUB. And this is what CubFinance is all about, providing liquidity and earning CUB for it. There are two key factors here to consider: harvesting and compounding.

Compounding CUB

On CubFinance, after providing liquidity into farms and dens, you can lean back and enjoy the growing CUB stake. You can see in real-time on each farm and den the CUB ticking up or go to the main page and watch your CUB accumulate from all farms and dens together. You could simply go away, come back weeks later and get your CUB. However, you will miss out on the compounding big time.

The more liquidity you provided to farms and dens, the faster you earn and the more often you should manually harvest and compound your CUB. This will cost 2-4 transactions, depending what you do with the CUB, so don't do it too often either, or else the fees will reduce your gains, even though they are rather small on Binance Smart Chain.

cubbusd 1.png

After harvesting CUB, I will put it into the CUB-BUSD farm for the largest gains. It has a 40x multiplier, the largest on all farms and dens on CubFinance. To do that, I need to swap half of my harvested CUB into BUSD first. I really like that pool, because it allows me to take profit on CUB immediately, but also keep half of it and earn the best rewards with it.

However, this is also reducing my CUB earning, because I only keep half of what I harvest. The ever growing pool liquidity I am providing to the CUB-BUSD farm that way can only compensate that slightly. Ideally, I somehow bring in BUSD from other sources and don't use half of my CUB. Should the CUB-BUSD farm drop below the APR rate of the CUB-BNB farm, I might jump to that one with my next batch of fresh CUB.

cub 1.png

Alternatively to the farms, I am putting my harvested CUB into the CUB den, which still has a 10x multiplier and brings in (currently) even better rewards than the bLEO-BNB pool despite its smaller multiplier (due to much more liquidity provided to to that farm). The advantage here is, that I keep 100% of my harvested CUB, a strategy that is clearly more speculating on a growing CUB price in the future, instead of immediate profit taking. Depending on the current CUB market price at the moment of harvesting, the one strategy might be more interesting than the other.

Since both the CUB farms and the CUB den have zero deposit fees, I can quickly go in and out and switch my harvested liquidity between them.

That is pretty much it for now. Much will change over time, with new farms and dens, changing APR rates and more experience with CubFinance in general. Let me know what your strategies are, in this exciting new LeoFinance playground.