How Unsustainable is CUB Yield?
APR on CUB has been bleeding every day since the day it was launched: and for good reason. Every coin that gets minted reenters one of the three farming pools and increases competition in these pools, pushing the APR down with unavoidable persistence.
At over 1000% a year, this yield is still insanely good and unsustainable. I'm making $1000 of magical internet money every day as long as the price holds (big if) and liquidity remains intact. But truly, how unsustainable is it? What can we expect long term?
Well, CUB mints about 1M coins every 5 weeks, but these first two weeks were ramped up and count as 5. On Monday, inflation and yield will be cut 50% from 2 coins per three second block to 1 coin. We're about to see how many weak hands are left to be flushed after this extreme hype is over and the APR's crash further back to Earth.
If we were at the base inflation level, current APR in the main pool would be around 500%. By the time Monday actually rolls around I'm expecting more like 400%-450% from increased competition.
After that we might expect APR to get reduced by 50% every time the supply of CUB gets doubled. That'll take 5 weeks after Monday, reducing the APR on the main pool to around 200% I'm guessing.
5 Weeks at 200% APR stilly sounds pretty damn good if you ask me. That is especially true if the price of CUB catches a bid to the upward direction, as this will increase APR in the farming pools by a proportional amount (100% proportions in non-cub pools, 50% in the CUB LP pools due to underlying collateral being worth 50% more than the new yield increase).
Once we get to that 200% APR level in 5 weeks, it would take 10 weeks after that for total coins to double again: a reduction to 100% APR... theoretically if token price is stable. That's 15 weeks of farming with yields that are absolutely unheard of in the legacy economy. Impossible even. Welcome to crypto.
15 weeks is a good chunk of time, and if Khal launches new functionality by then (he will) and if the token price is higher than $3.50 (it will) then APR will still be higher than 100% in the main LP pool even four months down the line.
APY
Assuming an average APR of 200% over the next 15 weeks, that's still 77% gainz if we compound the farm until then. Again, if $3.50 can be assumed to be a stable price (or undervalued), that's a legendary return for a four month period, and Q2 is likely going to be very good for the alt-market.
Considering many users are publically declaring they will support the $3 level, I'd say it's a safe bet we aren't going much lower than that.
What about LP farm?
It's also easy to overlook the farm we are getting from Pancakeswap LP tokens themselves. That's because the yield on basic LP farming is so tiny compared to the CUB bounty smart-contracts. However, it is there!
0.17% of all money sloshed around the pool gets trapped in the pool and distributed to all LP token holders. CUB got a listing on https://coinmarketcap.com/currencies/cub-finance/ today, and already we see high volumes of up to $500k a day... which is 25% of the total pool itself... being traded every day. Legendary volume.
Doing the math for myself is interesting. I own like 1% of the LP tokens in the pool... 1% of 0.17% of $500k comes out to $8.5 dollars a day. It's not much, but it is something, and this is a yield that many users aren't even going to know exists. It's just there in the background giving free gains to everyone farming the big pools. Imagine $250 being deposited into your bank account every month and you had no idea where it was coming from. It's kinda like that.
Future
Will we have 1000% APR a couple months from now? No... but that hardly matters. Especially in crypto where it's the base token price that matters the most. This community learned that the hard way in 2018. And 2019... and 2020. ROI doesn't mean much when the underlying token price bleeds out.
Regardless of the FUD, it's pretty clear that CUB will continue to have good returns for months even if zero functionality is added to the protocol. As we all know Khal moves pretty fast on these things, and I see no signs of slowing down: only more airdrops and rapid agile development.
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I recognize these yields as utterly unsustainable; I'm just hoping for a a gradual deflation of this balloon, as opposed to a sudden pop.
I have a lot of faith because Khal and LeoFinance has an actual proven track record and we're not talking about a project centered purely on a fancy White Paper and otherwise nothing but vaporware... which seems to be what a lot of crypto projects are about.
Investors are weird, though... just look at the price of Tesla stock; a company that had made more money investing in Bitcoin than in 13 years of making cars...
=^..^=
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Sorry to ask, but what is the proven track record of Khal and Leo? I've heard about it a lot, but I don't actually know what it is.I use the LeoFinance front end to post some of my content, so I'm aware of that site. I assume it's more than that, though.
I have a little money in their token but I'm not sure about adding more of it. It would help if I knew about their proven track record. Thanks.
There was a hack of the wLEO/ETH pool many months ago. Investors were made whole 100% by Khal and the team. Everything was fixed in an open and transparent way.
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He got hacked, but nobody lost anything? Good to hear. Fixing things is good... though I imagine if he hadn't fixed things we wouldn't be having this conversation.
I agree. So far we have seen nothing but integrity from Khal.
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Not easy to explain in a short and easy fashion *@drutter, but I'll try to hit some high points.
LeoFinance is the successor to SteemLeo, which was one of the very first "SCOT tribes"* created when the old "Steem-Engine" site was created.
In its infancy, the community "made sense" because crypto and finance was a clearly defined niche with a strong following.
When Hive was forked from Steem a year ago, SteemLeo was reborn as LeoFinance.
What sets the community apart from others is that there has always been a clear roadmap and ongoing development plans to have LeoFinance be much more than just "a community page with a native token," of which Hive has hundreds.
A large part of the track record comes from many aspects of integrity. When there's an announcement that a new feature is being worked on, it is more than just a vague promise; something is actually CREATED.
"We're building our own community front end from scratch." It HAPPENED.
"We're taking the LEO token to the external world." It HAPPENED.
"We're building a DeFi project." It HAPPENED.
The track record is in delivering the goods. The track record is also in creating a quality deliverable. Many things here have taken longer than planned... but we ended up with a QUALITY PROJECT rather than a half-assed one released purely in the interest of expediency.
Integrity, part III: which @shtup touches on... following a devastating hack/exploit of wLEO/ETH pool shortly after its release, Khal and crew were completely transparent about what happened, AND made all the victims of the hack whole again... which takes a LOT of determination and integrity.
Of course, this is just my own interpretation, as a largely non-technical community member.
=^..^=
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"What sets the community apart from others is that there has always been a clear roadmap and ongoing development plans"
Great but you had said we are "not talking about a project centered purely on a fancy White Paper". So I'm glad you did list some accomplishments :)
I guess the answer I was looking for was DeFi. Personally, it's complexity is way above my ability to get involved. So for me Leo (so far) is a front end and token, since I can't participate in the DeFi world.
And of course, I'm happy to hear that those involved have thus far not defrauded anyone. But if they had (as some projects end up doing) then we wouldn't be having this conversation because there's no way I'd be considering putting more of my money into them. Hopefully nobody would.
I personally don't get involved with defi or nft markets. I think they are gimmicky and at some point generally going to be unsustainable. I think the approach to growth and bringing people in works. Urgency and the need to use the product. Unfortunately i haven't seen that really play out yet in crypto. Especially with defi and nft just feels more like still catch the falling dagger phase or let me in before you get out. So alot of use and many wallets is generally a good sign for me. Although there are projects with many wallets but not exactly specifically social media interaction. Xrp.. bitcoin cash. generally have many wallets and are utilized alot but not known for their applications.
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I agree @mykos the cryptosphere needs more functional applications because the whole blockchain space cannot keep running purely on the promise that "blockchain is the answer to everything."
Sure it is... but SHOW ME. Don't just TELL me.
Primarily, we need commerce if cryptoCURRENCIES are every to actually fulfill their promise of being alternatives to fiat; otherwise we'll never shake the image of merely being "high risk investment derivatives."
=^..^=
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Well i'm going to level with you here curator cat. This is a tough conversation to have around here. So unfortunately when you got private equity and venture capital firms throwing millions if not billions of dollars to development teams to have their client books look good because they know they can pretty much manipulate the value and price of these cryptos.
What you now have is development teams getting rich early. I mean they don't really have to care about building practical applications. They may not even know what they should be building. So this group of developers and vc firms are getting wealthier but there isn't any real advancement in the space to the degree it's translating over well to the general end user which is what you want.
There is no sense of urgency. People for the most part walking around don't feel or have a need to use cryptocurrency. The majority of people i know are this way because the cryptocurrency doesn't have significant uses. So you got this cycle of dev create product nobody uses. Venture capital private equity firms either cooking books or manipulating the cryptocurrencies in some fashion or another with no regulatory protection.
it then moves on to what you touched on. Which is the same speech of well blockchain technology one day will have some use and it's worth investing in. Okay but worth investing in what exactly and where? lol.
Blockchain is a broad description of many networks and cryptocurrencies. So then most move to bitcoin. That's what wallstreet is going to do as they may be willing to follow the possiblity of money and see what they can get out of it but they aren't stupid
It's like Elon Musk spoke alot about dogecoin. He couldn't stop talking about it. When it came time to actually buy. He bought bitcoin lol. So they aren't crazy. The thing however is btc is moonlighting around a 6,000,000% return since it's inception. Now exactly how much larger is btc going to grow before it becomes just unrealistic to expect certain outcomes from. As well as fixed supplies yes they work for great price appreciation but that fixed supply also gives them an achilles heel similar to what gold did for humanity. Gold didn't bring alot of economic prosperity to the masses of people. This is because it just wasn't enough gold to go around. Same thing with btc. The average person is not investing in btc. Those are large institutions driving the price of btc.. owning most of btc.
If Satoshi is dead and is one person he'd probably turn over in his grave. Currencies bring economic prosperity because they move from hand to hand allowing for the opportunity. Gold and how btc is being used this is not something that is of importance to most people. So btc markets are being driven by that. It's not your next door neighbor going hey i just gotta use my btc today. if it's not a currency it's just not going to be any more important than going to your bank getting a cd or a time deposit. It's not going to impact enough people unless it gets into the 401k's retirements which it will however the future of btc and i mean the near future still seems questionable as to if its even the model we'll ultimately want to use. It's still some negatives in btc.
The final part is the people here in crypto. Who are these people? Well often times the people here i refer to as the bitconnect people lol.. What are the bitconnect people? Well if you thik back to bitconnect . Bitconnect was very successful because it preached a few virtures lol.. Such as get rich. You will get rich. Next tell your friends they will get rich. Third tell your friends friends and grandmother of the friend they will get rich.
This resonates with the average person out there in the world. He understands how wealth can impact his life. The problem this person is missing and that's most people here now. Is that you gotta help alot of people to make alot of money. Steve Jobs helped alot of people and based on this help created a $2 trillion company. That came after the help. It wasn't just for the sake of getting rich where no real wealth and productivity were created.
That's who are in this space now lol. As we go through our different stages of first retail investor, who's pretty much out now. Then the big institutions until they milk it and who knows what they'll hold in the future. Then us the guys in the casino area spinning the roulette wheel. This is what the stage looks like. We have to again remember economic prosperity comes from helping alot of people. We're not really doing that yet. We're not creating products that create real demand on supply side economics but we are creating bubbles and crashes.. nfts and Logan Paul selling air in a bottle lol.
*This post has earned 1 bbd *
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Even keeping a level of 3$ seems very promising. Other Defis have much lower yields, so i am wondering what´s the magic behind? Is it that Cub doesn´t pocket the money like the others do, but instead goes for a long term approach?
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LEO community propping the price up hard.
4% deposits allocated to buy and burn certainly doesn't hurt.
This market is propped up on trust that speedy development will continue.
Well let´s hope then. So far the track record is flawless!
and i have no idea what are you talking about, so i will farm, compound till the end of the year and then see what is going on :D
SORRY, FRIEND!
What I meant to say was: NUMBER GO UP!!!!!11
PHAT LOOTZ!
FREE MONEY!
Easy peezy lemon squeezy.
number go up and free money i do understand.
LOL
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Exactly the same ... it’s too advanced for my old brain cells. It took me a week to get my airdrop into DENS. Now I'm just going to watch ...
the thing is i should kinda understand it, but there are too much numbers and they are changing :D
what i learned in last few years is that i could trust Khal to try to do best he can so i am happy with that :)
thanks for the math. Unfortunately I can only follow people smarter then me. Math was my worst subject. How @trumpman does this makes me think he's a savant of some sort
Sick @trumpman burn.
$100 to anyone that can get under his diamond skin.
@trumpman savant 🍆🍆🍆
Like this guy?
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I see the initial price as a psychological support level under which will may give birth to FUD for the investors who know nothing about Lions or devs.
I expect to see the departure of weakhands on Monday, I hope that we can stay above $3 to prevent any possible FUD among the investors
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I'm actually hoping for $2 CUB, but that's just me.
Doesn't matter what price CUB is I'm buying on Tuesday/Wednesday.
It's all about the timing: Panic dumping + supply crunch = golden opportunity.
Are you going to stake on Den? For now, I'm planning to provide liquidity on BUSD pair but Den is also the second choice
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I like to put my farm into the Den in case the price moves higher.
If the price moves higher I sell half and move back into the LP for stability & higher yield.
History repeats itself, does it not? Weak hands make others rich, always do. I am with you. With my small amount of discretionary income available for investment I will always look for opportunities for long term gains.
I am a boomer, so really do not have the immediate gratification mindset that is so prevalent in the cryptocurrency culture.
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"Will we have 1000% APR a couple months from now?"
Just going off what you've been saying, no, and you won't have it next week (or even tomorrow), either. Perhaps saying 1000% per year is a bit misleading, since we know that even next week it's going to be far less, let alone after another 52 weeks. Maybe "about 3% daily" conveys the same info without the ridiculous notion that rates will hold relatively tight for the next 365 days.
What's the FUD being spread? Just curious. Haven't heard any. Only heard rocketship pumps so far :)
As we reach out to other farming communities on the BSC ecosystem we get grilled pretty hard. What makes CUB different than all the other bullshit? How is this going to be sustainable? Blah blah blah blah blah blah blah.
It's just a matter of adding some utility and building trust in the roadmap.
Unlucky timing, they launched their “own” farming platform yesterday. For sure they were not willing to dilute their community investment power.
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Please keep in mind that APR is displayed. APY is still and will stay in the thousands for a while.
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The posted APR for each den and farm changes on the Cub Finance in real time. I do not believe that anyone is being misled, far from it.
A person that has not done research into yield farming which is much like currency speculation (FOREX) should maybe not jump into the fray. Just a thought.
I am a pessimist and extremely critical by nature, but I see nothing but an upside with Leo Finance and their projects. Sure there will be bumps along the way.
I have done well as have others with this community. Unlike some other projects, it is never an if with @leofinance, it is a matter of WENTM.
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Definitely feels like a 'let it spin in the background' and check back in on it in a few months...
Yeah the days of freaking out about the crazy high yields is coming to an end.
Time to just log in once a day... compound the farm... and leave it alone.
Definitely shows the importance of being an early adopter in cryptoland.
In fact, when the yields go down in a few weeks CUB might actually attract more investors because people will be less skeptical of the lower yields. :D
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That plus a huge supply crunch from reduced supply.
Reduced flow should help somewhat. Also, hopefully the token burns will accelerate from increased use from something like the bridge.
I think involving the community was a good idea. There are a lot of people willing to give constructive criticism.
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If Cub token “dumps” I’m definitely going to buy more. @ $2 or lower would be a good entry point for me..
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As the APR goes down, the value of the token is bound to realize some more of its potential. If we maintain confidence in the future of our platforms, we can see that the APR may go down, but the price of CUB is bound to go up with its utility.
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That's the idea.
Market balances itself at some point, and I think that when many people realize that CUB farms are having a great APR, more capital will get in and therefore diminishing the APR as there will be a lot more people farming
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Feels like I'm invested in Blocktrades, Yabapmatt and Khal as individuals; rather than their projects. Brilliant guys with clear visions and a history of delivering.
Yield farming is like going to the casino in my view!
gamble gamble
Funny that you say that though... because the LPs (farmers) are the house of the casino and it's the traders who are the clients (suckers).
Well, in this case the farmers still holds the shit tokens, and if they go down in value they have losses, or am I missing something here?
in addition to the analysis of the farms, could you do one on the dens as well?
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You answered the exact question I was hoping to receive an answer to! How long namely these yields will last, especially since I am in with a small stake in 2 weeks time I got budget I can add, so instead of drawing that out and investing in some other stuff I'll stick it into the cub farming for the next few months most of it. See how much I can grow from a small start.
Thanks for the great post $WINE and !BEER
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it will balance out sooner or later.
There is a fixed number cub printed. If 10x TVL = 1/10 APR from now ( not 100% true but close).
I see early apr as early adopter bonus :)
In a few words #defi is a complicated matter.
Thus far it is the way if you are deep in crypto
you need to encompass and ride along.
APR,APY are just a way for the math to stay complicated.
Glad to beat my grey matter to see light in a few weeks.
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Bagus
Thanks so much for this one, I was wondering how to look at yield reduction I do appreciate this break down, I can't imagine how much this is going to set us ahead of other holders its kind of like a low key pre-mine but not as backhanded. We're the angel investors and we should be rewarded for our faith in the project.
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Yeah.
Considering that if Wall Street could find a trustworthy vehicle to get a liquid, sustainable, fixed yield of 6% that vehicle would capture billions of dollars, I'm not too worried about this yield falling to "only" 100%. lol The idea is to build the stake while the building is good. Rome wasn't built in a day. Just keep accumulating and staking and let Khal do his thing. As the platform fleshes out, influencers will find it and the community will grow.
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So far I have been compounding my earnings by investing it back. At the end of the day if the worth of my holdings is more than my initial investment, I would be very happy. Right now I guess it not the case yet.
For that to happen, the price of CUB has to stay at around 4$ at least for two days. Hope the capital stays as it is and let the growth happen slow and steady.
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1000% годовых через пару месяцев? посмотреть будем!
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where does this money come from? who is losing this?
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https://twitter.com/wheelly_dope/status/1373734726922502146