Diversification of Stablecoins is Key to Surviving Through The Dip Season: A Case Study of HBD to pHBD-USDC Vault
Greetings to my esteemed Lions 🦁 on the LeoFinance ecosystem and the entire hive blockchain. It's a beautiful day ahead and a time to look back at the current dip and reevaluate our assets to know if we're making progress or not. It's your friend @faquan saying hello from this part of the world.
One of the ways of helping a stablecoin retain it's pegged and give more values to its users as well as it's parent blockchain is to increase it's use cases. This increase is known as commercialization of stablecoins.
Stablecoins like the on-chain HBD lack popularity due to its limited number of liquidty pools to project it for mass adoption. It should be noted that after the paradigm shift from 12% to 20% APR for on-chain HBD savings, there arose a supply challenge. This supply challenge have the propensities of increasing the price of HBD on-chain and cause more problems to the blockchain.
One of the ways to keep the stablecoin safe is to create a bridge between two or more smart chain networks in order to create more yield optimizing platforms for holders of the stablecoin.
In the case of the HBD, the LeoFinance team launched the wrapped version of HBD on the Polygon network to provide liquidity pools for the native HBD.
Diversification: A Case Study of HBD to pHBD-USDC Vault
Like I said earlier, diversification or commercialization of stablecoins helps to create more values for holders of the stablecoin. This is true because it gives holders of the said stablecoin more avenues to choose from.
For instance, since the launching of pHBD in April, most holders now have dual options to invest their stablecoins. They could invest HBD on the Polygon network or transfer HBD to savings. Either ways are very profitable to them depending on their knowledge about the two avenues.
To be more safety conscious, an investor or holder of HBD could decide to divide the quantity of HBD into two, put one part in the on-chain HBD savings and the other part will be wrapped into pHBD. Both will yield some rewards at the end of the said time, but pHBD will earn more rewards due to its high APR.
Placing Both On-chain 20% HBD Savings and 40% pHBD
This particular section isn't to show comparison of the platforms in terms of which creates more value accrual channels, but to show how effective diversification of stablecoins can help stablecoins during dip seasons like the one we're experiencing at the moment.
Diversification helps to think from a dual perspectives. What this means in the light of native HBD and pHBD-USDC vault is that one could see clearly that the value of native HBD is stable with it's fluctuations around $1 and $0.89, while pHBD-USDC vault will still maintain it's on-chain value with more values attached to it.
An individual, is destined to smile if they follow the dual principles add stated above, rather than keeping all the tokens in one basket.
pHBD offers holders about 40% APR and 3-10% APY, 0.25% fee for wrapping and unwrapping pHBD to and from the polygon network, 0.1 HBD for PolyCUB owned liquidity (Pol), as well as participating in the xPolycub governance.
The Hive on-chain stablecoin (HBD) doing very well amidst the dip, and more values can be created through wrapping and unwrapping pHBD on the polygon network.
Thanks for stopping by my post.
Posted Using LeoFinance Beta