I am effectively longing the market pretty hard.
Whereas before I had 100% in the CUB/BUSD LP pool, I was generating 3.62% APR a day, while in the CUB den I "only" get 1.46% APR per day. With inflation this high, every day I sit in the den is going to sting a bit more.
The strategy here is to slowly start reentering the highest yield pool as the price goes up (assuming the price goes up). If not I'll just HODL like a champ and take the loss. Or not, who knows.
For example, if the price of CUB hit $6, I'd probably have to sell at least 5% of my den stack into BUSD and match it in the LP pool: moving out of the den 10% in total. I'd likely have to move out a little more if it hits $8; maybe 30%-50% total.
The more downside risk there is for CUB the more I want exposure to the BUSD/CUB LP pool due to the high farm and volatility being cut in half by the stable coin. Should CUB crash back to $4 I can always all-in the DEN again. I'm basically just gambling that $4 is the floor at this point, and I'm willing to hold all the way down to $3 because there should be an obscene amount of support there.
In a week there will be about 1.1M coins in circulation total. Even if I stay in the den the entire time I'll still end up owning 1% of the coins in circulation. Feeling pretty good about that, because again, if my tokens are earning extra farm in the LP pool: they are also for sale and I might not own 1% come Monday. CUB spiking in that scenario subjects me to high impermanent loss. So far I'm buying into the hype (obviously). Not only that but all the mechanics and direction of the project seem extremely solid. Bridge coming soon™; leasing dapp coming soon™. Should be good.
I'll just have to sweat it out for another 24 hours and see where the market goes. With hyperinflation this strong: every day matters a lot. I am also using the recent inflation reduction as a template for what might happen on March 22 when it gets cut again by 50% (2 CUB per block to 1). Looks like when yields go down farmers panic and sell, as predicted. Is that panic warranted? I'm betting not.
The more stake I have in the CUB/BUSD pool, the more I am hedged against the downside. The more stake I have in the den the more I'm longing the short-term token price. Clearly 100% long at the moment is a bit extreme so, like I said, I may have to rebalance tomorrow. We'll see.
Due to the farm of the LP pools being much higher, if the price just keeps trading sideways I'm going to lose this bet; should have just stayed in the LP pool for maximum farm. Still, it's fun to try: diamond hands and all that.
Obviously the hope for me is that this support at $4 holds stronk. I think it will: good unit-bias level and all time low is basically $3.50. The AMA was a bit anti-climatic, so I figure I still need to give some time for the market to catch up and let the new inflation rate do its thing.
It feels weird to complain about "only" generating $500 a day instead of $1300 a day. But theoretically at these values that's the reality of the situation. Who knows how much these coins will be actually worth when I trade them (if ever). Who knows if I'll be able to make up for these losses in farm by avoiding impermanent loss. It's a risky play to be sure, but I can lose the best and still earn money with the lower EV option. They are both likely positive Estimated Value plays: I'm just not sure which one will provide the biggest yield at the end of the week.
Being in the CUB den is the same as longing the market. The CUB/BUSD farm is much more hedged to the downside direction, and is still pretty good should the price go up. Obviously the LP farms are superior if we trade sideways due to high yield: so my current bet is UP UP AND AWAY. Everyone knows how good I am at these predictions so: act accordingly.
