After a very intense launch of the Polycub platform and a gazillion posts shilling the project, we have entered the "less interesting" phase of the project... Things aren't that dynamic anymore, APRs went down closer to the "real values" that we can see on other platforms... There is a significant level of FUD around the project, as all those who have hyped it at the beginning didn't understand the whole concept...
And to be honest, I didn't understand it either... I mean, I did understand the part, but I didn't have information on upcoming additions that were announced later, like bonding, collateral lending, or governance...
Created in Canva.com
So, after checking out the last post by 
As you probably know, I invested in the project on Day 0, and I went heavily into it as I followed all the preparations and evolving stuff from the old CUBDefi... I liked the initial idea, I like how the LEO team works, and I understood more-less how Polycub would work... But, from the beginning, I had one doubt about the sustainability of the project...
If you have checked the link from above, Khal was talking about the scarcity in that video and the importance of having a scarce asset... Scarcity itself doesn't mean anything if there is no demand... You can have the biggest pig farm in India, having low-cost production, but if you don't have a demand and people don't buy pigs, you will fail...
Also, Khal mentioned that the real "boom" happens when you combine scarcity with other "incentives", like bonding, lending, etc... Now, this was the part that I didn't understand as I'm not a financial expert (and this isn't any financial advice, btw...), but now, I have explained it to myself in, probably a very unique way... It is a simplified way, and maybe not even right, but you will tell me in the comments if that is right, or not...
So, the thing that bothered me the most was How will the protocol itself have enough money to pay LPs with Polycubs when emission comes to an end? Okay, the initial idea is that protocol is earning from fees around 10% of the APRs realized by adding liquidity on external pools (BTC-ETH, and all Kingdoms), but also earning PolyCUB as one of the liquidity providers...
But... That's 10% of profits, it's not 10% of deposit fees or such, so the number is "relatively" low... Also, I do understand that people were pooling a lot in the beginning and that 10% was a nice number in those moments, but it should pay investors in perpetuity... So, the protocol should have a steady income, and if you pay 10% of your funds, the next day you have 10% less in your ownership...
Now, I suppose that it's a great moment to show the solution to that problem (from my point of view)... To get those steady profits, the protocol needs a "regular flow of income", and the best way that it gets it is to have its own LP positions! How it will get that? BONDS. Offering people to sell their LP tokens (position in a farm or kingdom) for Polycub (with a discount) is a crucial element in the puzzle... I suppose that protocol has accumulated a nice amount of Polycub tokens from fees, and there is no better way to spend it than to BUY LP positions... Investing in the long-term income...
By doing that, the protocol will get more and more earnings from these LPs, that can be used for buying back those Polycubs from the market, and re-distributing it to the liquidity providers!
If we don't get this mechanism, I doubt that protocol can have enough funds in the future to create a demand (or better-said incentive) to provide liquidity to farms and kingdoms... APR would drop, people would remove funds, and TVL will go down...
So, that is my simplified view about bonds, their importance, and how I see Polycub as a sustainable Defi platform... Of course, all other stuff that is promised to be implemented is important for future growth... Feel free to leave a comment and I would like to see your views about this important topic!
DISCLAIMER: Any of this isn't financial advice and these are only my calculations and speculations for the platform... I'm just one of the investors like you...
Thank you for your valuable time,
ph
If you want to support my witness, you can do it by voting for 
Don't forget to follow, reblog, and browse my Hivepage to stay connected with all the great stuff!
You can also find me on LEO Finance .:. Twitter .:. LBRY
