No this is not one of those asinine token prediction posts. Well, not directly anyway.
The reason why I keep writing about this topic is because we have a tremendous opportunity thrust before us. Those who are willing to take advantage of it can really put themselves in fine position.
We see the word being tossed around relating to Polycub is sustainability. For that reason, we are going to analyze what is taking place and if we are going to see that outcome. If it is possible, what will happen to the price of xPOLYCUB over the rest of the year.
Deflationary Token
We will not go through too many of the details pertaining to the tokenomics since there are a lot of articles covering that (as do the Docs on Polycub.com).
What we will state is the basic premise of the sustainability idea is to have a deflationary token (POLYCUB) which is continually purchased through fees generated by the different Kingdoms. At some point, the USD price has to go up since the emission of POLYCUB becomes so slow. If we follow this out 6 months, it gets fairly easy to see.
The question is how close are we to it.
At this moment, we are still about 36 hours from the second reduction. Last week, the rate per block went from 5 POLYCUB to 4. In another day and a half, it goes to 3. This will continue on a weekly basis until it hits 1. From there it does a monthly halving.
By month 6, we are looking at a rate of .0625 POLYCUB per block. Carry it out two more months, well you get the point. By the end of the year, the emission rate of POLYCUB will be negligible.
Sustainability
The answer to this question is wrapped in another question: is this the goal.
Here we see where the concept of sustainability will likely occur because the team is focused upon that. In other words, the path is to keep building out new mechanisms that can assist in the sustainability of the Polycub system. The end game is to keep people engaged and using the platform. Unlike most DeFi where people scoop up rewards and split, this is designed to benefit the long-term holders.
It is at this point that we have to mention xPOLYCUB.
The, too, follows a deflationary trend. Since it is based upon the emission rate of POLYCUB, the less of that available, the less the total potential xPOLYCUB. As the PC-xpC ratio increases, the amount of xPC that can be created goes down.
As of this writing, here is what the ratio is:
This equates to roughly 587,000 potential xPOLYCUB by the 6th month. To contract, two days ago, it was 100K higher. Each day it is moving down as the ratio moves higher.
The reason why xPOLYCUB is so important is because there is where the bulk of the POLYCUB is directed. When it is purchased using the fees generated (or the penalty from early claiming), the bulk goes into the xPOLYCUB contract. This is why we see this number keep increasing.
A few days ago, it crossed 1 million. Now we see it is closing in on 2 million.
Over time, we will end up seeing more POLYCUB placed in this contract. Those who have xPOLYCUB stand to benefit.
$100 xPOLYCUB?
Is it really possible to get to $100 xPOLYCUB?
Before going into that, let us see where we stand at the moment. We are looking at just over $15 per xPOLYCUB. Also to provide a contrast, we saw this hit $5.70 a few days ago.
For those who are unaware, the xPOLYCUB price is simply the ratio multiplied by the price of POLYCUB.
The reason why this outcome is possible (dare we say probable?) is because we know a couple of things:
the ratio of PC-to-xPC will only keep going up.
as the emission rate decreases, as long as the fees remain consistent (or go up) there will be pressure, pushing the price of POLYCUB up.
We see how the second condition is likely to be met at some point when the emission slows down to near non-existent levels. That said, it could happen before it.
Therefore, what happens when the ratio keeps increasing while the price of POLYCUB is going up due to a lack of liquid supply being sold? The only valid answer is the price, in USD, has to increase.
Here is where we see something very interesting. To get $100 xPOLYCUB, we do not require a 7x from the present price of $15. Instead, we have two factors operating.
For example, if we see the ratio move to 30, which it will at some point, then $100 xPOLYCUB only requires a POLYCUB price of $3.33. That is a fair bit higher than the price level now but not absurd. It is less than a 3x from what we are looking at.
We are looking at a two-variable equation where one variable is guaranteed. We will see a ratio of 30. That is just a matter of time. So the only condition to be met is whether we will see a POLYCUB price of at least $3.33 when the first is met?
Hence we are back to the point of sustainability. If the tokenomics work out, and we do have a platform that is sustainable, then we are looking at a done deal.
What are your thoughts? Are we going to see $100 xPOLYCUB in the future?
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