The latest Leo AMA with Khal was quite an informative one and I would highly recommend you to go watch it here and keep a look out for the next one next week on Friday.
The tokenomics of Cub Finance is changing.
As I understand it, since Cub Finance launched, all it has been is a staking platform whereby you stake a particular supported coin and earn back the platform's asset, which in this case is CUB. The fees generated from swaps and initial deposit fees are then used to burn CUB, reducing the supply and thus increasing its value.
Now, supply and demand 101, even when you reduce supply of a particular asset or commodity without there being stable or incremental demand for it and instead, in the case of CUB, having most of that asset being dumped on the market, you are pretty much wasting your time.
You can only sustain that for so long before that entire system collapses. As the TVL reduces so does the demand for CUB. Specifically, when you have people staking massive quantities of stable coins and basically mining CUB risk free and dumping it all on the market.
In comes Kingdoms.
There are three things that stand out to me right off the bat, two of which I have highlighted in the image above.
From my understanding, Kingdoms are basically auto-compounding vaults. Some vaults, however, allow for cross-platform farming.
Take the example of the CAKE vault which is linked to Pancake Swap. The CAKE vault auto-compounds CAKE tokens and yields CUB tokens as well.
The vaults collect a management fee of 0.9% which is all then used to burn CUB.
The beauty of the management fee is that it is reliable and regular. This means the more people stake in the Kingdoms the more fees are generated for the burns.
However, for someone like me who has put a huge chunk of their portfolio into CUB, this is not what gets me excited the most. This excitement is reserved for the CUB Kingdom.
What is so exciting about the CUB Kingdom?
This brings me to the third thing which I did not highlight in the image and that is the "Fee to CUB Staking Kingdom!"
If you scroll to minute 16:45 of the AMA on YouTube Khal explains this very well.
In short, he mentions that every time the vaults auto-compound, 1% of that is directed to the people who have staked in the CUB Kingdom. That 1% will be in the form of BNB.
So, even as your CUB Kingdom vault auto-compounds CUB yield, you are also receiving the added incentive of BNB to continue staking.
I would assume the more CUB you have staked the more BNB you earn on the side.
You could then use that BNB to pay transaction fees quite easily on Cub Finance or any other BSC staking platform or slowly accumulate the tokens in a BNB Kingdom and continue farming.
If this is not bullish, I don't know what is.
The shift to Kingdoms cannot come soon enough.
Posted Using LeoFinance Beta