Decentralized finance (DeFi) first took the world by storm in 2020. Now, two years later, the world is witnessing several successful DeFi projects. Despite these successes, like any new field, several problems have also arisen.
Consider Bitcoin (BTC), which introduced the world to cryptocurrencies and blockchain but could only be used for payments, and its successor, Ethereum (ETH), which opened the world to other instances of use of technology. Similarly, while DeFi 1.0 has created revenue opportunities and liquidity issues with users switching between platforms in search of better rewards, 2.0 protocols seek to create stable value with concepts more advanced.
LeoFinance, a team that has built and managed apps for the past three years, helped usher in this era. Their collection includes social apps such as LeoFinance and LeoMobile (for iOS and Android), both of which form the backbone of the team’s broader goals.
With the successful building of applications on Binance Smart Chain (BSC), among other platforms under the team’s belt, LeoFinance spent seven months researching the next wave of solutions, DeFi 2.0, taking note of the revolution decentralized stand-alone applications (DAO) and platforms like Olympus (OHM). They intended to take their findings, “the key ingredients for success”, and apply them to the goals of their platform, which in the words of one of their team members is to “build a sustainable DeFi 2.0 yield app on the Polygon blockchain for our diamond paw community.
“Our ultimate ambition with the LeoFinance Web3 ecosystem is to expand the breadth and depth of our community. Breadth means attracting new users, and depth means reaching more and more levels of opportunities to enrich our users and create abundance for our community.”
With this mission in mind, the LeoFinance team launched its new application, PolyCUB. PolyCUB aims to improve tokenomics and mechanics over existing DeFi yield optimizers and open the eyes of community members to new opportunities on the Polygon (MATIC) blockchain.
Ensure long-term sustainability
PolyCUB uses Kingdoms, a cross-platform yield farming vault that allows users to earn via Base APY from the native platform and POLYCUB APY.
In this model, long-term revenue sustainability is ensured through POLYCUB’s underlying scarcity model. The App Token functions similarly to Bitcoin in that it is not a medium of exchange. Instead, POLYCUB has value directed towards it, ensuring that the necessary deflationary pressure is applied in the distribution. As a result, xPOLYCUB is ideal for those who plan to hold their assets for the long term.
In practice, anyone staking POLYCUB as xPOLYCUB in a single staking pool will hold an asset that will deflate forever. The value of xPOLYCUB versus POLYCUB is only increasing over time (10.71 CP per xCP at press time). xPOLYCUB acts as a claim on early harvest penalties generated by external capital (TVL) in Kingdoms coffers.
The value is further ensured by the redistribution of the platform’s tokenomics. As mentioned earlier, Kingdoms allows users to stake different tokens and earn yield in the form of automatically compounded returns, allowing users to increase their earnings with minimal effort. These payments are split 90/10, ensuring that 10% of the proceeds are redirected to the xPOLYCUB contract.
The platform also uses a curve-style harvest penalty method. Users can choose to wait 90 days for their crops to “unlock” and be claimable, or they can claim their crops instantly but pay a 50% early harvest penalty to xPOLYCUB holders.
This feature is associated with the liquidity held by the protocol which is generated by POLYCUB Bonding and a management fee of 10% on the return of Kingdoms. When combined, these features ensure that the price will rise in USD over long periods of time, and that value is funneled into the hands of anyone who stakes xPOLYCUB in a way that does not exist on DeFi 1.0 platforms.
Build growth mechanics
With an international community of thousands of monthly active users, including bloggers, readers and Web 3.0 users, LeoFinance is now focused on expanding its Web3 ecosystem to new blockchain opportunities like Polygon .
Their app – PolyCUB – uses OHM-inspired linkage mechanisms and couples them with curve-style staking with xPOLYCUB to create a durable yield optimizer.
By leveraging their carefully crafted mechanics, the team believes they are well equipped to drive long-term growth in an industry that lacks long-term thinking.
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