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:
- CUB-BUSD (CUB multiplier 50X) - TVL $1.1m
- CUB-BNB (CUB multiplier 34X) - TVL $1.1m
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:
- 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
- The higher liquidity, the lower the slippage and price impact of trades
- liquidity providers might prefer to be only exposed to CUB, rather than BNB movements as well?
- 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)
- 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