The truth is that I cannot agree with what you say. Why is a farm token useless? The farm is your utility, it depends on the farm. Let's take the example of PolyCub and a maximum offer of 7 million. If the farm rewards those who do agriculture with farm tokens, it must have a system that supports the price so that it is interesting to be in the Pool or give more farm tokens. Once the issued token reaches 7 million, the farm must go to the market to buy farm tokens to remunerate the pools, creating a balance or increase in price.
Another thing is that some farms issue a pseudo-free token to them, make a profit and abandon the token.
This has a name that I am not going to say and it could be repeated as many times as you want. In the non-virtual world doing this takes you to a place that I'm not going to say either but that most people would not like to be.
I think I missed the explanation, sorry.
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What don't you understand?
Protocol-owned liquidity isn't close enough to make a 'decent' impact yet and the price will keep going down in the meanwhile.
I estimate that the PoL should be around 50-100K$ now (and maybe I'm being optimistic).
Assuming this 100K$ is producing a 20% APR (again optimistic), we're talking about 20K$/YEAR (assuming everything else static).
20K$ (revenue per year)/7M (max supply poly) = 0,0028 cents yielded per polycub/year.
0,0028/0,138 (actual price) gives us a PER of ~49, which means it would take 49 YEARS for the PoL to sustain the current price of polycub of 0,138$. I'm not taking into consideration PoL growing or more utilities for Polycub... But anyway, multiply this number by 10. You got 4,9.
You'll wait ~5 years to break even with polycub...? Answer honestly. IMHO it's a 'HELL NO!'
Polycub should continue to fall as its only value proposition (yield) is being cut in half in a week or so. In my opinion, it's still overvalued.
Moral: don't invest in farms, just take the crops.
I do not intend to create any controversy, I only give my humble opinion.
I wasn't referring to PolyCub, I just took it as a farm token reference. I believe that a farm token can be just as valid as another token if things are done correctly.
I have not understood what you mean by the PER?
What PER did Google or any other similar technology have two months after listing?
Google now has PER 27 if I haven't looked at it wrong. Is it a lot or a little? I do not know, that's the truth.
In my humble opinion the market pays expectations not realities.
If you have a 1% 10-year US Treasury bond today it is worth less than it was a week ago and probably more than it will be the next.
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Me 2! I'm just trying to understand your point since I believe you're mistaken and I'm also trying to constructively share my point of why polycub (should) keep falling..
The PER is the Price to Earnings Ratio and it's a way to value shares of companies. And although is true that we can't compare apples with oranges in that sense, we can still value the current utility of polycub (which at the moment is to be bought & burnt by the PoL) by the revenue the protocol itself is able to generate.
The problem is that 99,9% of farm tokens are blatant money grabs and it's very difficult to make them sustainable unless you're a first mover. Damn! even pancake is struggling with that (and will die given enough time). How do you value if things ''are done correctly''?
I totally agree with you.
That is simple and complicated at the same time. You have to analyze the project and the team that mainly directs it. Any investment has some leap of faith.
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You make a few valid points. Some farms can have a use case 100% but i dont see it with polyCUB.
Thank you for your feedback and writing a interesting reply 😁
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