Polycub turns deflationary in September
The introduction and adherence to the VeXPolycub vault was a game changer for the future of Polycub. I've said it once and now I can say it again with even more certainty, Polycub is the best DeFi project. The introduction of the new vault will have a major impact on the price going forward because the protocol will have to buy enough polycub from the market to pay the Vexpoly stakers.
Polycub Inflation
Today Polycub inflates at a rate of 0.25 per polygon block but that will change to 0.125 around the 22nd of July. Let's take a look at the daily inflation for each of the next 3 halvings.
- 0.25 per block * 40K Block per day = 10,000 Polycub per day
- July halving: 5,000 Polycub per day
- August halving: 2,500 Polycub per day
- September halving: 1,250 Polycub per day
I assumed an average of 40,000 blocks per day which is a little over the actual number of blocks we have been seeing recently so the daily inflation is actually lower than what I've calculated.
VeXPolycub Buyback
All the polycub that will be bought to pay the Vexpolycub vault stakers will be out of the circulating supply until late July 2024.
At the time of writing, there are over 2 250 000 Polycub staked in the Vexpolycub vault. The protocol will have to pay a 20% APY to the vault so it will have to buy:
Convert the 20% APY into a monthly APR: 1.2^(1/12) = 1.53%
2,250,000 * 0.0153 = 34 425 Polycub per month
The amount of XPoly in the VeXPoly and the XPolycub/Polycub ratio will keep growing every day and as they grow the amount of Polycub the protocol has to buy per day will also grow.
September Daily deflation estimation
Assumptions for September:
110,000 Vexpolycub
1.53% Vexpoly Monthly apr
1.03 Vexpolycub/XPolycub ratio
23.50 Polycub/Poly ratio
Let's plug everything in:
110K x 1.03 x 23.50 x 1.53% / 30 = 1 358 Polycub per day
If my assumptions become a reality we will have 108 Polycub leaving the circulating supply every day after the September halving!
Deflationary Polycub
The economic meaning of deflation is the price of goods and services declining over a certain period. In the case of Polycub, it simply means that that the circulating supply will shrink every month, leading to less polycub being available on the market over time.
This will be a major milestone for Polycub. Come September the amount of polycub leaving the market will outpace the amount of polycub entering the market. The difference will only grow as Vexpoly and Xpoly keep on increasing and the monthly halvings keep on happening.
You're part of Leofinance so I'm sure I don't have to tell you what will happen to the price when the supply starts shrinking. All my predictions were made by overestimating inflation and underestimating the future growth of the Vexpolycub vault so the actual difference between inflation and deflation will be greater than what I've calculated.
Polycub is a gem and I strongly believe that it will reach $1 before the end of the year. There are so many more exciting updates coming...
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See this:
and this
Am I the only one who do not understand what these lines mean?
Or there is some misstyping ?
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I needed to convert the 20% APY into a Monthly APR so that I could figure out how much the protocol would have to pay per month to the VEXPOLY vault. If you simply divide by 12 you will get a wrong apr because of the compounding effect.
So in order to convert a Yearly APY into a monthly APR you have to do:
1+ Yearly APY = 1+0.2 = 1.2
Then you have to put it to the power of 1/number of periods (In this case 12 months in a year) hence:
(1.2) to the power of (1/12).
The second quote:
To calculate the amount of polycub the protocol has to buy per day you need to calculate:
VEXPOLYCUBS x Vexpoly/Xpolycub ratio x XPolycub/Polycub Ratio x Monthly APR / Number of days per month
110K is the number of VEXPOLYCUBS
1.03 Will be the Vexpoly/Xpolycub ratio come September
23.50 Will be the XPolycub/Polycub Ratio
1.53% or 0.0153 is the Monthly APR I calculated above
/30 To calculate the daily amount of polycub
Hope this made it clearer and easier to understand.
I only now realized I typed per day instead of per month in the first quote. Thank you for the heads up
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Now I can understand. Before (as in my quote ) was complete nonsence....1 192 500 Polycub per day :)
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Thank you for warning me! Was so excited to post I didn't even proofread the post 😁
Dang I thought it was deflationary already!
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If you count the diamond hands holdings as "out of circulation" we might become deflationary by the next halving 😁
I have some XPoly that I won't be selling anytime soon so it is pretty much out of circulation.
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lol this is true. There's also a good amount of fee and APR coming into it now the Polygon is pumping. Honestly I feel like PolyCub is on solid ground and has huge potential for the DeFi community right now. A lot of positive news is coming out of Polygon and a solid DeFi platform like PolyCub offers massive potential.
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I am hoping a backward action where #Polycub affects the price of Leo making the whole system awesome.
!BEER
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The success of one of leofinances projects will also help advertise and get new users to the remaining ones. Not only the price of Leo will get a little boost from it but also the price of Cub
View or trade
BEER.Hey @myfreebtc, here is a little bit of
BEERfrom @pouchon for you. Enjoy it!Learn how to earn FREE BEER each day by staking your
BEER.Now, after numbers cortrected, My BOOM is possible
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Does your calculation include the buyback from the PoL?
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Well, it does since the POL will give back all the Polycub it buys as yield.
Hence the only Polycub that will be locked is the one going into the Vexpolycub vault, the remaining polycub will enter the market once again.
Good question.
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That is an interesting take on PolyCUB and I wonder how sustainable it would be or if the treasury can keep up when PolyCUB prices go up.
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According to Khal the Multi token bridge and the oracle staking are making a lot of money but only time will tell how sustainable VexPolycub is as the price goes higher and higher.
good
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The positive side of investing on VexPoly is that the incentives are there, but by staking your polycub there you take away any short term stress and anxiety from watching daily charts and price action. You're in for the long run, so why should you bother about short term crap? I went in with 50% of my polycub, hopefully we see more community members do so, showing the outside world that we believe in the long term viability of the project!
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