With CUB at $3, some stake has moved out of the lucrative CUB-BUSD farm, and at the same time more CUB has been put into the CUB den. The CUB den has a much lower APR. Why is this happening?

Supply crunch Monday

Well, there is a a supply crunch coming in the form a reduced inflation on Monday I think it is. CUB was formerly being minted at 3/block, then last Monday it changed to 2/block. This Monday, it will become 1/block. Many are anticipating the price to start to go up once the inflation gets reduced (ya know, the ol' supply and demand thing). They may even think there will be pre-emptive buying in anticipation of the supply crunch.

At least, this is what I see when I look at the CUB-BUSD LP farm drop under $2 million in stake in a day, and the coincidentally the CUB den gets an increase in stake. I didn't take a history of the CUB den or the CUB-BUSD farm to see if the amount of one increased relative to the decrease in the other.

With less supply in a market, all things being equal, that signals an increase in the price. With less CUB being created, it 'should' go up in value. We can hope. And some people are getting out of the farm ahead of time to not lose any of their existing staked CUB when the system sells CUB to match the BUSD pair as the price goes up.

Steem inflation

Those who were in Steem in 2016 may recall there was some serious hyperinflation. Let me dig into what it was...

400 STEEM per minute

Or 160% inflation.

That equals 6.66 per second.

Yup... that's what it was. Pretty nuts, no wonder the price kept falling for so long. But after Dan reduced inflation to 9.5% on November 16, 2016, the amount of Steem minted per minute became 38/minute which is 0.63 per second or 1.9 per block. I don't know what it is now.

The point is, reducing inflation was good, and there was a slight uptick in the value of Steem when he announced the change and after it came into effect. But not for long:

It wasn't until May 2017 that the price started to really pick up, be it due to the inflation correction or not.

CUB price

Is CUB going to go up Monday? I don't know, maybe. Maybe not.

I think with the next slash in inflation and the consequential slash in APR in the various dens and farms, there is again going to be a sell off like last week. It seems logical to expect similar behavior. People are going to be selling before that happens if they are just in it to make a quick buck.

But some people are in it for the long haul. That's what the move from the farm to the den indicates to me. If you're are long on CUB, you want as much CUB as you can get. Going into the CUB den is a decent move if you expect CUB to start to climb. But that might take a while to happen (as it did with Steem).

If the expected crunch sees the weak hands dump their CUB then the value will go down. Maybe CUB will go down to $2 this time, or maybe lower, or maybe it won't, we can't really know. And that's an opportunity for those who see the value in CUB; the opportunity to buy the dip. It may be the lowest CUB gets, or maybe it will go lower, but at some point it will rise again.

LeoBridge

To make things more complicated, there is the LeoBridge coming out at around the same time as the inflation cut and expected sell off. CUB has potential, and @khaleelkazi is pumping out development which can in turn pump up the price. While some expect CUB to 'crash' or lose significant value due to the dumping from a slash to APR, it might be short-lived.

I think CUB will take a hit, but when the Ethereum-Hive/Leo-BSC bridge gets done, this will be a pretty big thing for Cub/Leo and the price will jump up significantly.

I think the future of CUB looks great. Lending is on the horizon as well I think... ;)

That's what I see coming. What do you see coming? Plan accordingly. Think for yourself and make your own decisions.

Posted Using LeoFinance ^Beta