CubFinance: What are Farms and Dens?

flauwy (74)in LeoFinance • 4 years ago (edited)

With the dawn of the new LeoFinance DeFi app CubFinance, we get tons of new features for LEO and various other tokens and make them work for us. The two main functions of CubFinance are Farms and Dens. Let's have a first look at them.

The Farms

The farms are the liquidity pools of CubFinance. Here you can pool two tokens with each other and earn CUB tokens as a payout. The payouts are done in real-time and tick up about every 10 seconds. You need to harvest your earned CUB manually though, which is a BNB transaction and creates (relatively low cost) fees.

Since the entire platform runs on the Binance Smart Chain, you will not be able to pool native tokens (except for BNB and BUSD) but the BEP20 versions of them. Those are basically like the wrapped tokens on the Ethereum blockchain or the SWAP tokens on Hive Engine. The easiest way to get them is by simply withdrawing the native tokens on Binance as BEP20 versions to your MetaMask wallet, that you prepared for the Binance Smart Chain.

Check out the brilliant documentation from CubFinance for more information: https://docs.cubdefi.com/

Everything on CubFinance works with the BNB token as base asset (just like with ETH on UniSwap and co), including paying all the fees for each transaction on CubFinance. You can easily swap in and out of all other tokens, using BNB, including bLEO and CUB. bLEO is the wrapped LEO token on the Binance Smart Chain and can be wrapped quickly directly from your HIVE wallet.

How to Wrap LEO into bLEO

All farms come with different multipliers, that are already factored in the shown APR. The more people/liquidity enters a pool, the more shrinks its APR. Currently we still see outrageous numbers, which will likely normalize over time.

Entering a farm does cost deposit fees, except for the CUB pools, which are free to enter. The bLEO-BNB pool has a 2% deposit fee and all other launch pools have a steep 4% deposit fee. Keep that in mind before you enter them and remember that the shown APR can change at any time. Also, each farm will create impermant loss for one of the tokens you pair in them over time. This means you will likely end up with more of one of the two tokens and less of the other one. High risks for potential high rewards.

What is really fascinating about CubFinance and its deposit fees, are how they are being used entirely to buy back CUB (80%) and LEO (20%) and burn them.

Currently Available Farms

Below you find the available farms from the launch day. I love the icons they created for them. Great design!


CUB-BUSD LP	CUB-BNB LP	bLEO-BNB LP

BNB-BUSD LP	USDT-BUSD LP	BTCB-BNB LP

ETH-BNB LP	DAI-BUSD LP	USDC-BUSD LP

DOT-BNB LP	CAKE-BUSD LP	CAKE-BNB LP

The Dens

Unlike the Farms, where you are at risk of impermanent loss, the dens offer a nice alternative for token holders, who don't want to pool their tokens but still earn interest for them. The APR percentage is generally lower here compared with the initial Farm APRs but it is also much easier and straight-forward. You don't need two tokens to pair with each other. It is a simple stake mechanism and you can always unstake again.

However, all dens require a 4% deposit fee (except for the CUB den, which has no fees). That is A LOT! Make sure you only stake your tokens if you consider the current APR for your specific den still high enough and when you plan to hold your tokens in there for long enough to make it count. Keep in mind, that all shown APR's are due to changes, depending how many people are using the same DEN. When more people enter a DEN, the APR will go down immediately.

All payouts are in CUB tokens, so in order to grow your stake in the token of your choice, you need to manually harvest your CUB every now and then, swap it for the token you want and then either add that to your dens stake or do something else with it. Alternatively, you can also keep the CUB and compound that by adding it to the CUB den or to one of the CUB farms, which is both without fees.

Currently Available Dens

Below you will find all the dens you can enter from launch day.


CUB	BUSD	WBNB

USDT	BTCB	ETH

DAI	USDC	DOT

	CAKE

Conclusion

This is all very exciting and new to most of the Leo community. Few have adventured into similar platforms in the DeFi space before. I have been on UniSwap since the start of the WLEO pool and CubFinance is NOTHING like that. So many options, so much stuff happening, CUB earnings in real-time. You can literally just sit there and watch your CUB grow and grow. At first it looked like I have to learn a lot but it is actually much easier than it might look.

However, don't let the high APR numbers cloud your judgement of the high risks involved with yield farming like that. Nobody knows how much the CUB token will be valued at, as soon as the airdrop has been delivered to LEO token stake holders, prices will fluctuate a lot again. This platform is not even 24 hours live and things WILL change. Entering all farms and dens without CUB does cost deposit fees, that are immediately deducted from your stake. You will need to earn that back first before you make any profits.

That all being said: Happy farming!