Hello to every Lion on the Leofinance ecosystem.
Since the change in APR interest on HBD savings by the Hive Witness in April from 12% to 20%, a majority of Hivers have moved their HBD into savings, making the HBD on-chain to become scarce a bit.
The other day I consciously checked a friend's wallet and discovered the quantity of HBD moved into savings and I tried to do same but from a little chunk of my HBD, while I used the chunk to buy some Layer 2 tokens for Curation.
After 3 days of my experiment, I regretted moving my HBD into savings on-chain, when I could gain more yield in wrapping the same quantity of HBD into pHBD and cash out big after 30 days and above as the case may be or probably buy some more Hive Engine tokens for Curation.
I have a little question to ask us on the Leofinance ecosystem, have tried to check the difference between saving HBD on-chain and wrapping the same quantity of HBD on Polygon network (pHBD) to check which of these platforms brings a better yield in terms of value accrual channels and interest for the same 30 days duration before claims.
My Little Experiment
If you check the image above, you'll see that I moved about 61 HBD into savings on-chain and if you look closely, you'll observe that after 3 days, the interest accrued was just 0.11 HBD and if you multiply this value every 3 days for the next 30 days, you'll observe that the interest made is approximately 1.02 HBD interest on saving 61 HBD.
For those who don't know what to do with spare HBD, this is very convenient for them and in a long term, it'll give them additional revenues, but for people like me that knows the value of the same quantity of HBD swapped into Hive Engine tokens and the amount of Curation rewards into accrue in one month and later one year, it's very discouraging to move my HBD into savings on-chain.
What pHBD Offers Users in Wrapping and Unwrapping HBD on Polygon Network
When you compare 20% APR (HBD) to 40% APR + 3-10% APY (pHBD), the difference is already clear and you should know that the interest on pHBD surpass that of saving HBD on-chain.
Apart from the APR and APY interest on pHBD, it offers users the ability to gather more PolyCUB during the process of wrapping and unwrapping pHBD, which is an additional income to accumulate just in one process.
pHBD on its own have 4 channels of value accrual:
- HBD - held as 1:1 collateral for the wrapped equivalent - staked on native platform (HBD on-chain savings) = value accrual for PolyCUB's PoL
- HBD - 0.25% wrap and unwrap fee = value accrual for PolyCUB's PoL
- HBD cross-chain arbitrage = value accrual for PolyCUB's PoL
- pHBD-USDC holders need to buy more POLYCUB to stake as xPOLYCUB to control governance and drive the pHBD-USDC vault yield higher
https://leofinance.io/@leofinance/xpolycub-governance-or-our-first-vote-on-yield-dynamics
Finally, the purpose of my post isn't to discourage any Hiver to pull out their HBD savings on-chain, to show that there are other means of generating revenue from utilizing the same quantities of HBD. Since we're in democratic era, make your choice between HBD savings on-chain and wrapping pHBD on the polygon network. Choose wisely!
Posted Using LeoFinance Beta