Do we need two CUB liquidity pools?

in LeoFinance • 3 years ago

I thought I would start a discussion, hopefully we can get some comments going.

I was thinking about CUB liquidity pools, and there are currently two pools:

  1. CUB-BUSD (CUB multiplier 50X) - TVL $1.1m
  2. CUB-BNB (CUB multiplier 34X) - TVL $1.1m
    image.png
    As you can see two pools splits the liquidity, and soaks up a fair bit of CUB inflation.

So do we need two liquidity pools?

A couple of things to think about when commenting your views:

  1. Pancakeswap router, will automatically route through other pools to get the best price, so if you just had a CUB-BNB pool, it would use a pancakeswap BNB-BUSD pool to make up a second leg of the transaction for those wanting to move BUSD into CUB
  2. The higher liquidity, the lower the slippage and price impact of trades
  3. liquidity providers might prefer to be only exposed to CUB, rather than BNB movements as well?
  4. Is there a possibility to free up some multiplier for the CUB kingdom? (perhaps not because to maintain the yields on a larger liquidity pool, the multiplier would need to rise at current prices)
  5. There are costs of moving pools for liquidity providers, namely gas fees, but these might be incurred anyway when migrating to Pancakeswap V2.

So given all these thoughts above, I am sitting on the fence on this one, I think this is a great discussion, I am probably leaning towards having a larger single liquidity pool, but can see the advantages of the current approach too.

What are your views? comment below

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#cub #defi #farms #liquidity #leo #leofinance
3 years ago in LeoFinance by
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     3 years ago  

    I think a lot of people like the idea of a stable coin. Pooling two tokens that are both (relatively) volatile might seem too risky. Hedging your bet with just one token and then a stable might feel more secure to them.

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     3 years ago  

    Yes so I guess it comes down to attracting capital for the liquidity pools, some just prefer stable coins.

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     3 years ago  

    I have been moving more into stable coins lately. It just feels safer to me even though I know it probably isn't.

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     3 years ago  

    i don't think it is profitable

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     3 years ago  

    Thanks for your comment, I am just curious what aspect you think isn't profitable? investing in liquidity pools in general? or having two pools splitting the earnings between two pools?

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