With the HBD interest rate recently going up to 20%, HBD and Hive are now VERY attractive investments.
HOWEVER, ATM HBD is also very scarce, and liquidity is so low that you can't buy more than $1000 of it anywhere without the price slipping by more than 1%.
The @leofinance team recently released a pHBD-USDC liquidity pool to solve this liquidity problem which is currently incentivised with a 58% APY, paid on PolyCub, 29% if you take the early harvest penalty which you incur unless you keep your harvested funds locked up for 3 months (After which there is no penalty and you get the displayed APYs).
NB this yield will probably drop to nearer 30% and 15% (with and without early harvest penalty) within a few weeks as the PCUB emissions rate halves in May (then again in June and again in July) and as more people enter the pool, but the @leofinance team have said it is 'likely' that the yield will stay above 30%.
Now, on the face of it parking your stable coins in a DEFI pool where the yield is going to be 15% or 30% paid out in a volatile asset probably doesn't seem as attractive as just keeping your HBDs in savings on the Hive blockchain, where you get a guaranteed 20% paid out in that stable coin!
HOWEVER, there is a case for putting at least some of your HBD and stables into pHBD-USDC....
The main reason for stacking into pHBD:USDC is MORE LIQUIDITY....
If you are a Hive or HBD holder, it is in your own interests to help solve the 'liquidity problem' - more liquidity means more people buying HBDs (or pHBDs) in larger quantities due to less slippage and that SHOULD be good for the Hive price: more HBD being bought should push up the price of Hive, if that HBD is being bought with assets other than Hive!
The mechanisms behind this are partly outlined in this post here by @leofinance
Further reasons for stacking into the pHBD:USDC pool
Firstly, ATM you can actually swap HBDs (as pHBD) for a slight premium of USDC......
If you're NOT swapping your HBDs but rather just pooling them with stables you already have then this is a good way of 'dragging any other stables you've got into a higher return.
Think about it like this - IF you've got funds in the other stable pool on PCUB at 15%, you're better off having those pooled with HBD at 30% rather than just having half that HBD in savings for 20%. Your overall average return will be greater if you're pooling!
Secondly, IF you are prepared to wait for 3 months then you WILL get a better return in PCUB than keeping your HBDs in savings, although that does depend on the PCUB price over the next three months - PCUB could also go up of course.
Thirdly, having greater liquidity will also help you get your HBDs out later on... it's always nice to have MORE routes out for your HIVE/ HBDs rather than having to rely on specifically Hive channels to centralised exchanges (and there is very little HBD liquidity out there on the exchanges!)
Having said this, there is maybe slow and steady is a better way to stack yer pHBDs...
Ideally we want $ millions of dollars $ of liquidity in the pHBD:USDC pool to attract whales into the Hive space.
We could potentially have $3 million of liquidity in the pool by the end of April if most of the HBD in savings on Hive was moved out of savings and into the pHBD:USDC pool, assuming a 50% swap of HBD for USDC.
We could have more if those accounts holding those HBDs as savings already have matched funds in USDC... up to $6 million.
However, maybe slow and steady is better - with people gradually converting SOME HBDs to pHBDs and pooling that with stables, we gradually get more and more liquidity, every stays, well, stable, and we get this kind of accelerating virtuous-cycle - rather than just a sudden 'BOOM' we've got $5 million overnight....
I just don't think it will take that long to build SERIOUS liquidity, I mean once we're at $500K, that'll speed up the process to $1M, then again to $2 Million and so on....
I quite like the idea of a gradual and accelerating trend upwards of HBD being bought in ever increasing amounts, which pushes up the Hive price slowly, which generates more HBD printing, which increases liquidity which allows for more purchasing.
In short, I get the feeling we will get to large liquidity volumes with sustainable yields with an increasing Hive price even with just small steps...
But I'd still suggest we all do SOMETHING to support this liquidity pool right now!
Find out More
- This post will get you started on the pHBD:USDC pool and how to add liquidity.
- PolyCub site
Posted Using LeoFinance Beta
I really like the fact that this is two stable coins paired together. It makes me feel like it is a really solid investment. The fact that it pays out in PCUB doesn't even bother me because I am already invested in that. I just need to get some funds together to push into this!
Posted Using LeoFinance Beta
I'm a big fan of stable pools, but pure HBD is hard to compete with IMO!
Good point!
Posted Using LeoFinance Beta
It helps a great deal and LPs surrounding stablecoins are going to become ever more popular.
That is how we are to keep the focus. A lot of the basics of finance are starting to penetrate DeFi. We are moving away from the loony time of all spec.
pHBD is a good step forward.
Posted Using LeoFinance Beta
Yeah, the road map that Khal talked about in the AMA yesterday it really expensive if PHBD does what they are hoping it will do and then they expand that out in to the other platforms.
Posted Using LeoFinance Beta
pHBD-USDC LP is everyones responsibility to grow it's liquidity and as you said slow but stead wins this one.
Let's look at how things would pan out of the course of time, PolyCUB has been remarkable in this journey nevertheless.
Posted using LeoFinance Mobile
it sounds promising but still need to do my own research, to minimize risk
The challenge with this is, if one or two seed it, then it collapses if they pull out. I agree with the slow and steady as well as diversified contributors. It can be painful to grind higher but it is a more solid pool. Even if people keep adding to it weekly, it will grow. Plus we know the pool itself will be adding since it is putting some of the HBD in savings and generating more pHBD monthly.
It all feeds upon itself.
The next goal is to get over $300K.
Posted Using LeoFinance Beta
Yeah I know what you mean, I much prefer slow and steady virtuous cycles!
I honestly don't know how things will play out when the emissions are halved so I don't feel that comfortable going with the pHBD/USDC pool myself. However, I do think it will help the Hive ecosystem quite a bit and the current returns are quite nice. From what I have seen from Khal, I know he plans on changing the rates so it maintains above 30% but nobody can really predict how the price of polyCUB will react.
Posted Using LeoFinance Beta
I know what you mean, I'm happy in there for now, but I'm only taking out 10% of my HBD, the rest of it is staying on Hive!
A call to arms if ever there was one!
Posted Using LeoFinance Beta
Something else that's quite nice about this pool is that it 'drag's any other stable assets into that higher APR too.
Although in the wider scheme of things this does my head in calculating what the best pool pairs are compared to just staking, opportunity cost and all that!
Well said, let’s get that ball rolling. What we do now will have great compounding effect.
It's just little and often from everyone I'd like to see! Every little helps!
That’s the way it works in a decentralized community 😊