DeFi was one of the most popular crypto trends of 2020-21 and it continues to evolve with time. Finance has totally changed with the inclusion of Blockchain Technology and Crypto. We have now entered the age of DeFi 2.0, which is trying to solve the problems of centralization, security, scalability, and most importantly liquidity.
Liquidity Sustainability
Liquidity mining rewards reduce over time and the liquidity provider's devotion moves to another project that is delivering high yields. Attracting more LPs over time was becoming an issue with DeFi 1.0
Olympus DAO protocol was the first one to lead the DeFi 2.0 movement which proposed a solution to this problem. If the protocol holds the liquidity in a DAO then it will eliminate the problem of LPs leaving like cryptodiggers to find their next target. It is known as Protocol Owned Liquidity (POL) which @khaleelkazi keeps talking about in his recent videos and posts about PolyCUB launch.
Olympus uses a "Bonding" mechanism in which LPs provide LP Tokens in exchange for their native token OHM at a discounted price. LP tokens are formed with OHM as one of the joining tokens. It allows Olympus to accumulate its own liquidity over time. This makes Olympus its own market and it helps to keep operations going even if there are fewer LPs. That's DeFi 2.0 liquidity sustainability for you. I think PolyCUB is going to follow a similar strategy to implement POL mechanism.
Achieve more liquidity that would automatically increase the value of the treasury overtime.
Why xPolyCUB?
Once you will stake your PolyCUB in the kingdom, you will receive xPolyCUB in 1:1 ratio. xPolyCub balance will increase over time as per the APYs. When the protocol creates PolyCUB, it will be distributed to LPs and a small percentage will go the smart contract DAO. Since there is now more PolyCUB than xPolyCUB, to maintain 1:1 ratio with PolyCUB, it increases to achieve equilibrium. This allows the ability to compound yield just by holding the xPolyCUB token. I still don't know how the Tokenomics of PolyCUB would work and this is my guess. There will be a dily POLYCUB Airdrop to CUB Holders For 60 Days as far as I remember.
Pretty excited over the fact that we have survived DeFi 1.0 on BSC and now evolving to the next level on Polygon. Once PolyCUB is released, I am going to acquire as much as I can because I feel that we are going in the right direction. DeFi 2.0 is the future!
What Should Be Your Next Move?
THIS 🚀🚀
What are your thoughts? Are you excited about the PolyCUB Airdrop? What are you going to do with it? Let me know in the comments!
