pHive - Understanding The Expansion Of Hive Use cases and How Polycub benefits from this.
Interoperability
Although many may have forgotten all about the idea of going cross-chain in the first place, being interoperable was key. The future of Defi is based upon many developments that vastly includes interoperability, this ability to interact with numerous chains is going to be one of the most important factors of Defi.
Like I've talked about in the past; "Why Defi will displace traditional banking system", this ecosystem is evolving into what will revolutionised the way money is being managed, which spans through savings, spending, investing, lending and borrowing, bringing all of this together and we have a great economy.
When you look at the structures of this network, everything begins to add up if you view it coming together. The traditional banking system is wide, ranging from central banks to commercial banks and to micro finance banks with many other layers to it, now, porting this to the world of cryptocurrencies, an ecosystem that puts off most of the flaws of the existing system, you have a number of platforms, ranging from yields optimizers, to swap protocols and all the way to lending protocols, all of this comes together to make up "DEFI, it's not all about a "single protocol" but majorly about the coming together of all.
pHive
Hive is beginning to see some expansion when it comes to use cases, on the basics it's great to witness and there are a lot of mutual benefits to these developments. pHive is basically hive on the polygon network, backed at a ratio of 1:1.
They are many ways this integration can benefit polycub and also bring value to hive, which I'd highlight some of my best knowledge!
HBD/USDC vs HBD/POLYCUB
If I was running the show I think I'd definitely make an HBD/POLYCUB LP rather than HBD/USDC. The reason is simple: HBD/POLYCUB adds a ton of value to the POLYCUB network and the price of POLYCUB would go up. However, there are tradeoffs in both directions.
The reason why we wouldn't opt for HBD/POLYCUB is that POLYCUB has very little liquidity to the outside, but USDC has BILLIONS. A HBD/USDC pair is highly valuable to Hive, while HBD/POLYCUB is highly valuable to Polycub. I think the idea here is that we provide a lot of value to Hive directly and fill a void that was in dire need of being supplied (no HBD liquidity). @edicted talked about replacing USDC with polycub some time back when pHBD was coming alive. There are many reasons to have had that integrated, which "adding value" to polycub was the major reason. But the aim of pHBD was to build a stronger market for HBD to eradicate its major flaws which is low liquidity. This had little or no effect at all on polycub price, reasons being that it was only but shocking value from the network. Well, to many we thought that was what happened, but the fees accumulate ranged over thousands of dollars which is really great for polycub. However, the tables are about to turn with pHive setting in. The beauty of this pool is how much of a mutual effect it will have. Tying it to polycub means more buying pressure for polycub, and that also means more money to be earned by the network, furthermore, it means more value to be distributed through yields and buy backs. To hive, it sets in yet another use case for the token. If you look at the recent "Community Token Talk" you'll find interesting conversations which the last one may have attracted me. Many people on hive complain about witness operations, and speak many dirties that don't really make sense. This chain is governed by everyone, this is made possible with hive power. Witnesses being representatives of each person are voted in by hive users using HP, and not to forget that unlike the system of governance practiced in the world today, hive Witnesses can easily be dropped down with the removal of votes, making them lose operational powers. This tweet talks about hive in literal sense and this is just one of the use cases of HIVE, governance But what if participating in governance could have some more benefits? Like actual cash flows? There is no perfect system of governance but there are trials and errors that births better structures. While having a little conversation with @jfang003, a lot of things were opened up as to how pHive could really bring value to this ecosystem. While @jfang003 was most concerned about three things if I'm not mistaken; " Liquidity, Yields, Loss" how? Of course he wasn't concerned about his own Loss, but more about the protocols losses. Looking at the lock period of Hive power, 13 weeks, to hive it doesn't seem ideal that the same method of putting a couple percent of HBD to work in savings was going to be replicated with hive, going to HP. This in turn would kill liquidity as proposed by him and only means the pool gets more yields allocated to it, which obviously are taken from other pools to feed it, since polycub is built to drop that ratio overtime, so the bottom line reads losses since most of the funds can't be utilised to regenerate income for the protocol. It's a valid argument, but there are many layers missed in this, and there are as follows; Greed looks like the Nigerian flag(🇳🇬:) Greed and thirst for power, which falls back to greed, runs the market. As long as a network is paying good, there's bound to be constant support flowing in. People are searching for more ways that's more profitable than a 8-10% Apr on staking to use their hive, if pHive is paying more, then why not? With more hives leaving the system, from individual accounts, one account now stands to hold a number of it, that means possible governance power shift if that is to be staked! So if people trust leofinance to best utilize that stake, it's likely going to remain there because why not? They pay good for it. Just as Leo delegators earn Leo tokens at a higher Apr, this is just another way to incentivize investors. The many advantages that comes with this is; if truely a portion of these deposits are staked, Leo earns more curation value, which in turn means more rewards going to the community creating contents on leofinance, which in turn means more traffic on Leo frontend because people will definitely chase the money, and as such, Leo will equally earn more ads revenue, which will be used to buy back Leo and reward Leo stakeholders, much wow! The value moves in that pattern and everybody is happy. So if we're to list out the benefits; Can people run out of money? Yes but not when you're involved in an enormous economy. Polycub has value built in its four corners, literally. This was my last response to @jfang003. Liquidity can always be put to work, we just don't realise it. But when looking at how this will suck value from the rest of the pools, we have to consider, first, the "price effects" You can't participate in the pool without owning polycubs, this means, you have to buy right? So that means, with the limited supply of polycub, this can largely affect the market value of polycub, meaning that every bit of rewards paid out as yields is worth it. However, on the notion of wanting more yields than less yields, my reply was "polycub governance". All one has to do is get more polycub and vote for the favourite pool to be allocated more yields and consider that if that pool wins, whatever assets in that pool stand a chance of growing in market value as many will want to participate for the higher returns there. If one in fact runs out of money, xpolycub lending is here to help, just deposit your polycub there, and take out a loan to participate in other pools. As @tweentyoneagainn would say; "What's the "BIG" idea? This is an experiment afterall, but it's quite an eye opener of what value this can really create. It's just enormous, but of course, not financial advice Oh wait, there's no conclusion, see you in the next post :) Posted Using LeoFinance Beta
Power
Greed
What about governance?
Decentralisation in distribution of polycub rewards!
In conclusion
People simply operate in their own self interest. That is the key to incentivization projects. Make it so individual self interest aligns, as often as possible, with the overall interests. Not easy to do but it is a good starting point.
Posted Using LeoFinance Beta