Like anyone on Leo, I also jumped the gun and gave the Cub Finance ecosystem a try in the last 24 hours. There are already a ton of very good tutorials on how to get the best out of it, including adding liquidity, farms and dens, so I'm not gonna write about this.
Instead, I'm going to write about something more subtle, something that I was able to discover only in this context - namely in the context of Cub Finance.
You see, I'm not unfamiliar with DeFi, I have a bit of liquidity added to some pools in the Ethereum ecosystem, and words like Compound, Aave or Uniswap aren't strange to me. On the contrary.
But this Cub Finance thing opened me to the Binance Smart Chain ecosystem. Which is exactly like the Ethereum, minus the ginarmous gas fees. Make no mistake, these gas fees are low on BSC, because we're dealing with a centralized chain. On Ethereum, we're dealing with a fully decentralized chain (even if some of you may argue that there are still whales who are making the games, it's a decentralized game, those whales are keeping each other on their toes, so to speak).
And this entire centralized finance ecosystem on BSC, or CeFi, as I named it, made me think about something. We invented the crypto space, we invented Bitcoin and Ethereum, to get rid of the middle man. To make sure we're not at the mercy of a single switch. This system is affordable, in the sense that (almost) everybody can run a crypto node, and be part of it, but it's very expensive to maintain (think miners and their electricity costs).
In other words, to avoid the potential corruption of the middle man, we created something corruption-proof, but more expensive.
The assumption that the middle man is corrupt is almost as expensive as the middle man being corrupt, only we spread this cost from the very beginning, on top of all the participants. Because it's spread, we perceive it as low, most of the time. But it is expensive.
And the obvious question is: what if the middle man is honest? Then the expenses will be small, as they should be, while the stability of the system will continue to be high. BSC is a centralized blockchain, which, until now, has been proved to be honest (this may change in the split of a second, I'm well aware of this, I'm just theorizing). Because it's centralized, it's cheap to run transactions on it. Because it's cheap, individual actors can actually make profits by providing liquidity.
So, it turns out that, at the end of the day, we're still way better by being honest. Maybe crypto is not the ultimate answer to the world's finances, with its decentralized expensive approach. Maybe it's just a hedge, a constant threat to the crooked and corrupt middle men, keeping them on their toes and forcing them to be correct. Otherwise, the price of their corruption will be again perceived as high, and people will migrate to expensive, but fully decentralized solutions.
And, just FYI, while I was pondering all these, I made almost an entire Cub.
I'm a geek, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Hive you may stay updated by following me @dragosroua.
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| I know the feeling. That's why I created hive.supply, an easy to use and accurate tool for calculating your HIVE rewards | |
It's free to use, but if you think this is a useful addition, I'd appreciate your witness vote.
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I just wrote about that very thing here, after reading about what's coming to Hive here. Hive is going to solve both those problems over the next year. Pretty exciting. And we've actually got some time to accumulate it before it happens. Could be fun!
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maybe we can have a decentralized and cheap finance thingy on Hive, some people are working on that already :)
I am hugely appreciative to the work done by the Leo Finance community and I do see a lot of progress. I cannot stop thinking, though, that there is a conundrum to be solved: if a platform is completely free to use, then what are the incentives for those operating it? At the other end, we see that only those operating the network can make some money (Bitcoin miners, for instance). We saw that Geyser pools weren't a big success, and that was because fees were tiny. Humans were, are and will always be driven by greed and fear.
I don't think there isn't some middle ground here, but it's a very delicate place to be. Hive & Leo can make it to that place, as things are looking now, though,
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Interesting view, for sure :) By the way what's the minimum amount of Leo that is worth pooling. I have no experience with defi and I don't want to jump in without having an idea on how many tokens I need.
It depends on many variables. You should have a look at the CUB tokenomics, because that's the token you will be generating. In the first week (until March 15) there will be 3 Cub / block, second week 2 Cub / block, and form the 3rd week there will be 1 Cub / block. What this means is that in the first 2 weeks you generate more Cub for the same "collateral", and from the 3rd week ongoing, the supply will decrease, hence the value of the Cub will increase (at least in theory). So one strategy would be to get in fast, get as much Cub as you can in the next 2 weeks, and then take profits and keep just a decent amount in a farm / den.
Also, a farm is riskier - but more profitable, than a den.
There is also something (very important)to be pondered for the airdrop / claimdrop. At the moment of writing, the claimdrop is still worked on, it appears there will be a site where you can swap the Cub "coupons" you get on Hive, for Cub on BSC. The initial parity was 1 Leo / 1 Cub, but the Cub is now valued at $7, whereas Leo is just $1. So if they maintain the parity in the claimdrop, meaning everybody will indeed receive 1 Cub per 1 Leo, then there will be a sharp increase in supply, which will probably drive the price down. It may also be that Leo price will increase and Cub will go down a bit, so they may "meet", let's say, around $3 - in this case, the supply surge / price drop won't be that dramatic. But it will still be relevant.
It's still a very risky bet, and if you don't know what you're doing, it's best not to risk too much, or even to stay on the side until the waters calm down and you get more predictability.
And this, obviously, is not financial advice.
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Wow, thank you for the extensive answer. I understand now why people are so excited about getting in quick. I was thinking of jumping in with like 10 Leo but like you said: I don't know what I'm doing and I fear I might make some mistakes and just lose money
Is BSC a PoS chain with a small number of blockproducers?
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Yeah, you can say that... Maybe this link will help: https://cointelegraph.com/news/crypto-community-slams-binance-smart-chain-over-centralization
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While BSC isn't the most decentralized chain calling it centralized isn't that fair- they use POSA for the consensus
It's way more centralized than ETH or BTC, that's for sure. Enough to play in a different league, IMHO.
...the dubious achievement of 'trustless-ness'...
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Well, life was never easy. Or not convoluted. :)