ICYMI: we had a weekend launch of PolyCUB V2 - we've been working on this release for months and it includes vexPOLYCUB, Governance UI, PolyCUB Improvement Proposal System (PIPs) and of course, the Multi-Token Bridge (pHBD, pHIVE, pSPS, pLEO).
The launch of PolyCUB V2 signifies the convergence of quite a few mechanics that we've been working hard on. In this post, we'll focus on vexPOLYCUB.
The goal of the vexPOLYCUB vault is to create a singular vault that fulfills the mission statement of PolyCUB - generate safe, reliable and growing yield for our Web3 community. By buying POLYCUB and staking it into xPOLYCUB and then locking it as vexPOLYCUB, you're signaling long-term support of the platform along with amplified Governance Power to govern what happens in the PolyCUB DAO. In return, this vault generates the most safe, reliable and growing yield on the entire platform: a 20% fixed interest APY on your POLYCUB stake... forever!
Just 48 hours have passed since vexPOLYCUB went live. You can now stake your xPOLYCUB into vexPOLYCUB - which stands for Voting Escrow xPOLYCUB.
In short, vexPOLYCUB is a 2 year lockup on your xPOLYCUB. In exchange for locking your xPOLYCUB for 2 years, you gain two core features:
- 20% fixed interest annual yield (more on this below)
- 3x Governance Power
40% of the xPOLYCUB Supply Has Been Locked for 2 Years
As of this writing - just 48 hours into the launch - 40% of the total circulating xPOLYCUB has been locked for 2 years.
This is incredibly bullish. The xPOLYCUB vault holds the vast majority of the POLYCUB circulating - 5.2M POLYCUB at the time of this writing.
The total circualting supply of POLYCUB is 6.7M. This means that xPOLYCUB holds 77.6% of all POLYCUB that exists... 77.6%!
With 40% of that vault getting locked for 2 years, we can now examine how much POLYCUB is illiquid - since anyone in the vexPOLYCUB vault will have to wait for the unlock cooldown in order to unstake from vexPOLYCUB:
- 40% of total xPOLYCUB is staked in vexPOLYCUB
- 91,932.243 xPOLYCUB staked in vexPOLYCUB
- 91,932.243 xPOLYCUB = 2,117,567.285 locked for 2 years
- Current value of vexPOLYCUB stake = $350,000 USD
Is 20% Fixed Interest Bullish for POLYCUB?
After seeing the collapse of Terra LUNA, some people have come to question the ideals surrounding a 20% fixed interest rate - as that is what initially brought LUNA and UST so much adoption but also became part of their downfall as all that UST liquidity got locked up in Anchor and depleted their reserves.
In a comment on the release post, @bitcoinflood asked the following question:
This is a great question and one that we should address - is a fixed 20% APR going to be the downfall of POLYCUB?
Now that there is $350k in the vexPOLYCUB vault, that means that $5,833.33 USD needs to be distributed to the vexPOLYCUB contract each month.
If the price of POLYCUB rises, then so does this $5800 figure... what happens if more xPOLYCUB gets staked? How will the protocol handle this? Will the reserves run out? Will inflation go up?
The answer is simple: the greater the $ value of this vault, the more bullish POLYCUB becomes.
More $ in vexPOLYCUB = More Buybacks of POLYCUB
I'm extremely excited about how we designed the vexPOLYCUB vault. Essentially, the 20% fixed yield is entirely paid for through Multi-Token Bridge Revenue + Protocol Owned Liquidity Yield.
MTB is generating over $4,000 per month solely from wrapping fees and oracle staking (not including internal arbitrage).
This combined with PoL revenue means that we have an extreme surplus of revenue compounding in the PoL treasury each month. Up until now, we've allowed that PoL to continually compound.
With the release of vexPOLYCUB, the contract is now taking a % of that revenue and autonomously buying POLYCUB to distribute to vexPOLYCUB holders.
The Counterpoint
The argument against the vexPOLYCUB 20% fixed yield is that it can ruin the platform. The counterpoint is that the more yield (in $ terms) that needs to be paid to vexPOLYCUB holders, the greater the monthly buybacks of POLYCUB.
If this yield was paid through inflation, then it could easily wreck the platform. The more $$ that gets staked, the more inflation that needs to come to pay a fixed % yield - this is what happened to Anchor.
However, vexPOLYCUB is built different. It's not paying 20% through inflation. It's paying 20% through buybacks.
As POLYCUB holders, we should want to see the $$ value of the vexPOLYCUB vault grow immensely overtime as this simply means that the protocol needs to purchase more and more POLYCUB each month.
$5800 Per Month
As of this writing, there is $350k staked in vexPOLYCUB. As we mentioned, this means that $5800 worth of POLYCUB will need to be autonomously bought by the Protocol to pay yield to vexPOLYCUB this month.
That $5800 (and all POLYCUB buybacks) are then deposited into the vexPOLYCUB contract. This also means that $5800 worth of POLYCUB is removed from the liquid circulating supply, put into xPOLYCUB and then staked into the vexPOLYCUB contract - locking it for the entirety of the unlock period (~2 years).
We've now created what is essentially a "sink" for the POLYCUB token where every month, the protocol is buying tokens on the open market and making them illiquid by staking them to the vexPOLYCUB contract.
Governance
Governance is the core utility of PolyCUB. The platform is based around an idea to generate long-term, sustainable, reliable and growing yield for our Web3 ecosystem.
With this idea, we've released the POLYCUB DAO. The governance of our platform and how it moves forward is in the hands of all xPOLYCUB and vexPOLYCUB stakeholders.
vexPOLYCUB stakeholders have a 3x amplifier on their Governance Power which can be seen on the https://polycub.com/governance page.
PIP2 & PIP3
PIP2 is already live. It asks our userbase to vote on increasing the MTB wrapping fee from 0.25% to 0.35% or 0.50%.
Whichever receives the most votes will go into effect on July 23rd (voting ends July 22nd).
After PIP2 is completed, we'll release PIP3, PIP4, PIP5, etc. etc.
There are a lot of POLYCUB Improvement Proposals lined up, so get ready to vote.
Additionally, weekly yield governance is in effect. Make sure you go and cast your votes (re-cast your votes if you voted before the UI went live, as we cleared out the DAO and reset all votes with this release).
PIP3 will be a governance vote to add a pHBD-POLYCUB vault. This could have a significantly positive impact on MTB revenues - which ultimately buyback POLYCUB and distribute to vexPOLYCUB holders.
Our Mission
Our mission is to build one of the first DeFi platforms with truly sustainable, reliable and growing yield. This is not a mission that we can tackle alone.
We're building the technology as fast as we can. How that technology gets utilized to generate revenue for the protocol, stake into long-term lockups like vexPOLYCUB, get more TVL and capital pooled on the platform and ultimately buyback more POLYCUB each month is up to the community.
Let's build this together, 🦁s! Stake your HBD and HIVE across the MTB and help bolster the monthly revenue!
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage and share content on the blockchain while earning cryptocurrency rewards.
Our mission is to put Web3 in the palm of your hands.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
LeoMobile (IOS): https://testflight.apple.com/join/cskYPK1a
LeoMobile (Android): https://play.google.com/store/apps/details?id=io.leofi.mobile
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
Polygon HBD (pHBD): https://wleo.io/hbd
Polygon HIVE (pHIVE): https://wleo.io/hive
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
LEO Wrapping Bridge: https://wleo.io
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exciting news!
Will vexPOLYCUB be used to apply for loans in the future? I remember that this was also provided for xPOLYCUB.
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Also forgot to mention in my other comment - the colalteralized lending protocol will collect an interest rate on outstanding loans to vexPOLYCUB & xPOLYCUB staked in it.
This is another source of value accrual to be combined with the MTB Revenue + PoL Revenue. These 3 forms of value capture are used to buyback POLYCUB each month and pay the 20% fixed interest
Much bullish
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If I remember correctly, didn't you mention doing the same thing to the CUBdefi website? Shouldn't that mean we should be stocking up on CUB too? :)
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Most of the things that are developed for POLYCUB can be ported to CUB without much trouble. The same goes for outposts into other EVM compatible blockchains like Fantom, Avalanche etc. Think of how SushiSwap is on 14 different blockchains with similar features. Various CUB DAPPs could be the same very SOON™
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Yes! xPOLYCUB and vexPOLYCUB are both able to be utilized as collateral for collateralized lending on the platform
When this is released, it will have an even more interesting impact on vexPOLYCUB - as it stands, if you stake into vexPOLYCUB, you don't have liquidity. You're holding for the long-term and earning yield in your vault each month for the next 2 years
When lending is released, you'll be able to collateralize that vexPOLYCUB stake and get liquidity instantly while still earning 20% fixed interest on the vexPOLYCUB that is collateralized.
This is a self-paying loan - modeled after Thorchain. Releasing Governance and vexPOLYCUB are a key step in releasing the PolyCUB DAO Collateralized Lending model.
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This is an essential part of defi's evolution. Polycub can really make an impact, affecting all of cryptocurrency.
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I believe this is a wonderful development and a lot is set to take place with the positive impact the vexPOLYCUB is said to accomplish
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Oh so exciting!! Better get my xpoly staked. Your project is coming along. Well done!! Grow baby grow! :)
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🦁
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This is all fine and dandy. But there are things that still need to be addressed I think.
1-) As the price of POLYCUB increases, the USD amount that is locked will also increase. Which in turn will increase the USD value of Monthly Buy Backs, which means it will lock even more POLYCUB in vexPOLYCUB, which means it will have to buy more in the next month. What will happen if any point POL Yield and MTB revenue can't cover the 20% APR?
2-) What will happen to yields that would have been allocated to the farms from POL Yield and MTB revenue if they can only cover the 20% APR for vexPOLYCUB?
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1). This is true. An exponential rise in the POLYCUB price would = a significant increase in revenue needed for buybacks. That being said, the rise in POLYCUB price also leads to other positive downwind effects - namely, more bridge revenue, more capital staked on PolyCub (higher apy’s), etc. Additionally - and this would be a “fallback” in the scenario that POLYCUB did something on the order of 10-20x and held for a significant period of time (also doing it so quickly that bridge revenue doesn’t keep pace) - the PoL holds a signicant amount of POLYCUB which means it’s reserves would increase in value right alongside the vexPOLYCUB vault. The second fallback behind that could be a reduction in the 20% fixed APR and can be put to a DAO vote at any time. I doubt these 2 fallbacks will be necessary, but it is good to know that they are both in place and at the ready
2). Also not an issue at current prices - in the scenario you described of POLYCUB going up significantly, say 10-20x: this would also increase the yield APY on all vaults as they are paid in POLYCUB
Price going up will tend to fix things and just lead to more revenue. The importance of your qesurions is extremely high though which is why we’ve allowed PoL to compound exponentially and gain a large stake in POLYCUB itself.
In the scenario of price going down, obviously PoL + MTB can support heavily. I think this creates a significantly strong floor price for POLYCUB. The price going up and leading to scalability issues is the concern which is why the reserves need to be large and revenue on the MTB needs to be continuously increased and focused upon
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Well, I don't know the exact figures of how much POL+MTB is earning each month. But the second scenario doesn't need POLYCUB to go 10-20x. It could just edge that point of only being able to pay the 20% APR. If this continued for a few months I could see it affecting the farm yields negatively.
The probability of it happening is low, but still, I think it is something to be considered and have an action plan against.
Thanks for your time!
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At current prices, the max that could go in is the max of the current TVL of xPOLYCUB. If we have a 100% staking rate, then that’s $800k staked in vexPOLY that needs 20% yield.
Current rates are well surpassing these figures. We do really need to release a report on PoL and MTB earnings. I think people will be blown away once we do.
Was waiting for these specific mechanics / UIs to be released. We should have our first monthly report out soon™️
As always, I appreciate the questions and agree with you - we always need to think of these scenarios and have good plans set out proactively 🦁
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So much value is locked and so much value will need to be harvested by the protocol. If the market also shows some positive signs, we might see a proper comeback for the PolyCUB cryptocurrency.
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a development such as this is why dao(s) will always be a thorn in the flesh of the so called crypto regulators.! The x3 governance power feature is such an eye catching one I must say !
I love the constant experimenting, switching it up and trying new ways to bring value to holders.
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I did some Staking yesterday and staked my xPOLYCUB in vexPOLYCUB yesterday.
Exciting times… let’s Hodl a bit more…
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Vexpolycub is definitely another massive development in the community. Good to see how well things are getting better here
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Happily deposited all my xPOLYCUB into vexPOLYVUB for the next 2 years. Looking forward to seeing Project Blank and LeoThreads grow!
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Great initiatives spilling out of this. I m glad.. well done everyone..
VexPolyclub is new vault for me. Thanks for explaining 20% APR but it has more worth than this APR. Although I am new but I am happy to take a look on this opportunity.
Nice
This is really nice..
This is so interesting and I think it's high time I registered my presence fully in this wonderful community. @ksam what do you think?
Vex polyclub rocks and it will make a good investor base
Waiting for Hive burning or any deflation model.
This is a great project and provided that it can fulfill the interest rate of 20% APY annually is something Wonderful and my question is how guaranteed is the sustainability "forever"
very interesting
This is a good one. Every I see a better future coming 🤑🤑🤑
23.3537 PC/xPC Ratio
1 xPOLYCUB = 23.35 POLYCUB
$1.207 xPOLYCUB Value
https://polycub.com/staking
hmmmmmm.....
Thanks for the details.
Good info.
Fantastic achievement it's great to see a lot of people participating and trusting Leo Finance. Well done everyone.
I am longing to see myself to understand all this crypto language so as to follow up. Knowing hive is my first step, coming to see lion of finance Community is another blessig to me and anyone who want to learn. There is no limit in learning.
Hope the price goes up
This is really interesting, amazing and educative
Well, it's new year and I guess it's time to invest my time Into knowing this community
@leofinance, I'm sorry, I am new here at this community, but I need to ask... Can I post here a piece over the Venezuela's economic crisis? And I if could, can I count with your support, here on HIVE? Thanks you for your kindness.
https://ecency.com/hives/@tanzeelasarfraz/my-day-of-life-as
muchas gracias por la información
great
DeFi only works effectively when investors and participants take on the appropriate mindset. Compounding prior to "realization" is actually a DeFi principle few realize... this is where and how income models are created for investors.
Congrats on POLYCUB need to grab some
This is s great news!
I really wish the project a great success.
Great post about this topic!
😀
nice
🖒
Looking forward to seeing the effect of this continuous sink effect on the price of PolyCub.
Plus looking forward to seeing collateralized lending on Polycub, with self repaying loans.
Exciting time ahead!
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