New application merges DeFi 2.0 protocols with yield optimization on Polygon

Decentralized finance (DeFi) first took the world by storm in 2020. Now, two years later, the world has grown to know 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 up to additional technology use cases. Similarly, as DeFi 1.0 brought about earning opportunities and liquidity concerns with users switching between platforms to pursue better rewards, 2.0 protocols are looking to build stable value with more advanced concepts.

Helping to usher in this era is LeoFinance, a team that has been building and managing applications over the past three years. Their collection includes social apps like LeoFinance and LeoMobile (for iOS and Android), both of which exist as the backbone for the team's larger goals. 

With the successful build 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 decentralized autonomous application (DAO) revolution and platforms like Olympus (OHM). They intended to take their findings, "the key ingredients of success," and apply them to their platform objectives, which, in the words of one of their team members, is to "build a sustainable DeFi 2.0 Yield Application on the Polygon blockchain for our community of diamond paws.”

“Our ultimate ambition with the LeoFinance Web3 Ecosystem is to expand the width and depth of our community. Width means getting new users, and depth means achieving more and more levels of opportunity to enrich our users and create abundance for our community."

With this mission top of mind, the LeoFinance team has released their new app, PolyCUB. PolyCUB aims to improve tokenomics and mechanics over existing DeFi yield optimizers and open community members' eyes to new opportunities on the Polygon blockchain (MATIC).

Guaranteeing sustainability in the long-run

PolyCUB uses Kingdoms, a cross-platform yield farming vault that allows users to earn through Base APY from the native platform and POLYCUB APY.

In this model, long-term earning sustainability is ensured through POLYCUB's underlying scarcity model. The app's token operates similarly to Bitcoin in that it is not a medium of exchange. Instead, POLYCUB has value directed toward it, ensuring that the necessary deflationary pressure is being applied in distribution. As a result, xPOLYCUB is ideal for those planning to hold their assets for the long term.

In practice, anyone staking POLYCUB as xPOLYCUB in a single staking pool will hold a forever deflating asset. xPOLYCUB's value against POLYCUB only gets larger with time (10.71 PC per xPC at press time). xPOLYCUB acts as a claim on early harvesting penalties generated by external capital (TVL) in Kingdoms vaults.

Value is further ensured through the platform's tokenomics redistribution. As previously mentioned, Kingdoms allow users to stake different tokens and earn yield as auto-compound returns, allowing users to increase their earnings with minimal effort. These payouts are split 90/10, ensuring that 10% of proceeds are redirected to the xPOLYCUB contract. 

The platform also uses a curve-style harvesting penalty method. Users can opt to wait 90 days for their harvests to "unlock" and be claimable, or they can instantaneously claim their harvests but pay a 50% early-harvest penalty to xPOLYCUB holders. 

This feature is coupled with Protocol Owned Liquidity which is generated through POLYCUB Bonding and a 10% management fee on Kingdoms yield. When combined, these features ensure the price will increase in USD terms over long timeframes, and that value is funneled into the hands of anyone staking xPOLYCUB in a way that is nonexistent in DeFi 1.0 platforms.

Building the growth mechanics

With a community of thousands of monthly active users internationally, including bloggers, readers and Web 3.0 users, LeoFinance is now focusing their efforts on expanding its Web3 ecosystem to new blockchains of opportunity like Polygon. 

Their app - PolyCUB - utilizes bonding mechanics that are inspired by OHM and coupling them with Curve-style staking with xPOLYCUB to create a sustainable yield optimizer.

By leveraging their carefully crafted mechanics, the team believes they are well equipped to drive long-term growth in an industry lacking in long-term thinking.