xPOLYCUB Is Only Going To Get Stronger

taskmaster4450le (81)in LeoFinance • 4 years ago

There is some questioning the validity of the Polycub platform. Many feel that it is going to not work out and this is evident by the price of POLYCUB. The fact that the USD price has dropped like a boat anchor is causing many concern. Of course, there is always questioning when something is new. However, there is also understanding what is taking place and how it ties in.

Before going any further, for the sake of this article we are going to presume the features are added:

bonding
collateralization/lending
HBD liquidity pool
Weighted rewards

All of these are vital to turn Polycub from something that is just like everything else to a new innovation. Without them, none of what is going to be written here is applicable.

We also have to clarify about the POLYCUB token. This is not deflationary, at least not at this point. It is disinflationary, meaning the emission rate continually is reduced. There will always be POLYCUB created, it will just be such an insignificant amount at a certain point that it almost becomes fixed.

Source

Phase 1: Deflating Token Emission

We do not need to go deeply into this since it was covered for most of the last month. Starting this past Saturday, the emission rate is now halving roughly every 4 weeks. We are at 1 POLYCUB per block. This will be .5 in next month.

This is what creates the scarcity.

It is also smart to mention that are more than half way through the claimdrop. There were 1 million POLYCUB being issued. It is likely there is less than 450K to go. Whatever the number, we know this will be done by the first part of May.

Of course, scarcity on its own does nothing for value. Unless people are incentivized to HODL it, the path to zero will be followed.

Phase 2: Buy Demand

The additional features that were mentioned are what will create demand for the token. We can already see the scarcity of POLYCUB simply based upon the emissions.

Both bonding and lending have the potential to create demand on the platform. The former obviously allows for the protocol to assume an "ownership state" in the different pools. This will filter some of the rewards to the protocol which is then distributed.

Lending can add an interesting twist since this has the ability to allow people to access stored value for greater returns. This naturally applies buy pressure since it is also going to see many of the same people taking loans and adding to existing positions. Here is where Diamond Paws can enhance their HODLings.

Of course, without activity, we are on the same path as mentioned above. As with anything in crypto, utility is vital. Is anyone using this? Here is where Polycub has the opportunity to stand out.

The HBD pool is one of the biggest difference maker. Why is that? Simply because there are few other options out there. The liquidity on that token is awful and people cannot easily access Hive from other platforms. Here we could see a bridge from the world of Polygon directly into Hive. Using pHBD in a manner similar to pLEO with Hive-Engine is a useful service, one that many will likely use.

Naturally, there has to be the tokens in the liquidity pool. To get people to move their HBD over, it will require a decent return. One of the positives is the LP will be paired with USDC according to remarks made by Khal. Hence, we truly have a stablecoin pool so the loss is not as much of a concern.

This alone can change the fortunes of Polycub.

When Will The Price Stop Dropping?

This is impossible to answer. We have no idea when the POLYCUB, as priced in USD, will cease its downward fall. We do know that the emission rate will be a lot less 5 weeks from now. Thus, we can make a presumption recent events are going to expand.

Over the last few days, things slowed down a great deal. The price, in USD, has leveled off a bit. Please do not take this to mean that it is necessarily done. There could be more downside. However, we are to the point where everything is slowing down.

It is a step that is encouraging. To me, this means that we are seeing some equilibrium between supply and demand. We will see how long it lasts.

All of this comes down to incentive. What is going to incentivize people to remain on the platform (their money more specifically)? Many feel that without the inflation from new tokens, all is lost. Of course, most of the inflationary tokens we saw ended up going to zip too.

Polycub has a few things going for it. The list above are just a few examples of what can stimulate demand. We also have to keep in mind there are cross pool tokens that are being brought it. Perhaps some of these end up in the protocol also.

The pHBD liquidity pool is a big step forward. It is something that stands out from the rest.

We also have the weighted reward system which is going to require a certain percentage of xPOLYCUB to get full rewards. Here again, we see more incentive to buy.

Is all of this enough to sustain what is going on? Time will tell on that. However, it seems to me this project was thought out in its design. We also have the fact that there are more features being added (a HIVE liquidity pool was also mentioned).

Ultimately it all comes down to volume. How many times can the pHBD pool, as an example, flip its liquidity? If it does it once per year, there is very little there. On the other hand, if can get up to 5 million pHBD in it and roll it a minimum of monthly, then we are dealing with a different situation.

Can the pHBD LP pay 20% APR? If that is indeed true, that is a strong return for a stablecoin, putting it near the top in the industry. Of course, HBD will mostly accessible only on Polycub since the liquidity elsewhere is basically non-existent.

Governance

According to the latest AMA, xPOLYCUB will also act as a governance token. This means that rewards in the different sections are going to be based upon the holdings of those with xPOLYCUB. Obviously, this means that people will have to add to make sure their LPs and whatever else they are involved more of the reward pool.

Whether this helps to drive more demand for POLYCUB remains to be seen. The point is that more layers keep being added to the platform. When you have a team that is willing to take feedback and keep adding, this helps to drive improvement.

We are still in the early part of the emission curve. There is still a lot of decrease in the token distribution to come. We also have, at present, zero buying pressure from the protocol. What happens if this can get a couple million dollars into it?

Of course, as the price of POLYCUB increases, so do the yields on the platform. Here we see how the reverse of what we watched the last few weeks is reversed. What will it take to get us to that point? We might be at the bottom or it could be another month down the road.

Either way, we will get some type of buying pressure coupled with a reduction of the POLYCUB token.

To me, it seems this combination is only going to get stronger over the next couple months.

If you found this article informative, please give an upvote and rehive.

gif by @doze

logo by @st8z