The entire Hive ecosystem is awash with excitement due to the announcement that Marky was increasing his Witness node to 20% on the HBD in savings. A number of other Witnesses did the same thing. We will see if this reaches consensus.
For me, the excitement grew a couple weeks ago when Khal mentioned that Polycub was going to have a liquidity pool for HBD. It is going to be paired with USDC, meaning it is a true stablecoin pool. The intended APR was to be around 20%. It will be interesting to see how this changes if the Witnesses change the interest rate to 20% on the HBD savings.
The key question is going to be how much will pHBD help Polycub?
Deepest HBD Liquidity Pool
Khal stated the goal is to have the "deepest HBD liquidity pool" there is. That means we will see the most HBD in any one place. Is this an outrageous goal? At this point, no since the liquidity for HBD is awful. However, opening it up to other chains is crucial.
We also will likely get a bridging mechanism similar to what takes place with LEO. There we can put LEO in and get either pLEO or bLEO out. I imagine pHBD will be linked in a similar manner. The key is that when moving from pHBD to HBD, one is on the Hive blockchain. LEO ends up on Hive-Engine.
One of the main reasons for Hive to increase the HBD interest rate to 20% is to match what is happening with UST. Through the Anchor applications, UST deposited will earn 20%. This is one of the most aggressive rates with a stablecoin. Hive is seeking to at least match it.
For this reason, if there is any degree of success with the project, where is the HBD going to come from? How are people going to acquire it?
Obviously, people can convert Hive to HBD via the conversion mechanism. The challenge there is how many will really know about that. Ultimately, that is going to have to be done by people on Hive. Besides, HIVE is not exactly the most readily available token there is either.
Here is where Polycub could enter the picture. If this LP can get 10 million HBD in it (more than the total floating amount now), it could be a valuable resource for those seeking to get involved with the Hive savings rate.
Could this end up being one of the main liquidity pools and destinations for people to get HBD? If Khal gets his wish, it will be.
Leofinance Inserting Itself In The Center Of Hive
This should come as no surprise to many, but it appears Leofinance is inserting itself right in the middle of Hive. HBD might be one of the most important features there is with the ecosystem. This has the potential to seriously alter how things operate. Hive can suddenly be cast in an entirely new light.
For this reason, Leofinance and all its different applications could benefit. The move into Decentralized Finance was questioned by many. Yet, it is now evident that having access to a couple chains could be helpful. Leofinance could be the bridging mechanism that is so badly needed.
Of course, for those involved in Polycub (and ultimately Cubfinance), this could mean a lot of fees. Consider how much HBD could be required if this is even a smidgeon of what happened with UST and Anchor. If we see tens of millions of dollars coming in, it is a real game changer.
It is safe to say that a portion of that will filter through Polycub. Each time that happens, the LP is ringing up transaction fees. If the protocol ends up bonding there and the Treasury has a piece of the LP, that could really strengthen the return to token holders.
Many overlook the potential of fees. Consider how exchanges clean up on them. While there is little chance of this matching a Coinbase or something like that, we know that we can see tens of thousands of dollars generated monthly.
Naturally, all of this hinges upon the success of the different pools. If there is also a Hive LP, perhaps also tied to USDC, we could see a tremendous on-ramp to Hive. While this might not seem like such a big deal right now, it could be in the future. It does appear Hive is starting to get its legs.
All of this is part of Hive Backed Dollar (HBD) Becoming A Stablecoin?. Having Polycub providing an access point could be a win-win situation. Of course, a lot of this will depend upon the details of the LP.
pHBD could be what separates Polycub from a lot of other projects out there. When it comes to use cases, servicing HBD and providing a way for people to get it, especially large amounts, could really set up Polycub.
We are starting to see things coming together.
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