Launch Day Nostalgia
I am not sure how many of you were actively engaged when CUB launched back in early 2021. It was quite a tremendous blast-off, I can remember that much! CUB managed to breach $12 within the first 48 hours, completely outperforming my own and many others’ predictions. The APY was absolutely insane on the CAKE vault for the first few hours and then slowly began to drop. After a number of days, the APY was pretty much in line with the DeFi industry benchmark. If you farmed your CUB, the depreciation in the token value is not really of great concern to you. However, investors who purchased CUB earlier on might be getting a little impatient with the current market sentiment and price action.
There is currently a lot of development taking place in the Leofinance and CUB space, which should act as an encouragement to weary investors. I know that we have seen the price of CUB go through some heavy storms of late but there is hope. The announcement of the PolyCUB airdrop helped to bolster the price for a good few weeks. Unfortunately, negative market sentiment and price action will always hit micro-cap projects like CUB extremely hard. One needs to bear this dynamic in mind and perhaps even take a look at the performance of other projects of similar-sized market cap. This is what happens to micro-caps when the market turns red, it’s unavoidable.
Emissions also don’t help when demand is weak due to the general sentiment of the market. However, there is an upside to emissions.
Farming Additional Cub
Being on the end of new CUB tokens entering the market is one sure way to benefit from an inflationary asset. However, this is only truly beneficial when the market is stable or rising. If you purchased CUB tokens last year, then this is not the case for you. So while current buyers are able to benefit from this approach, what about the faithful early investors who purchased CUB during the launch? Even those who purchased tokens in the months that followed are most likely also taking a heavy knock with the current downturn in the market. Farming additional CUB is simply not going to be sufficient at this point. You will need to factor in another ingredient that most tend to shy away from.
Time Adds Another Dynamic
Simply farming more CUB in the short-term helps but not that much. Whether or not you chose to be a long-term investor in CUB is now irrelevant. This is now the best opportunity you have to claw your way back. Receiving rewards over a number of months is something that can complement your CUB stack. However, compounding is a dynamic that becomes increasingly powerful the longer it is allowed to continue. Given that the APY is quite high, approximately 45%, long-term staking/farming should be able to increase holdings significantly.
Ultimately, this enables investors to move back into the black, or even the green without the price reaching previous highs. As an example, if you managed to double the size of your stack over a prolonged period of compounding, you would be in a much stronger position. If your holdings have doubled, then your entry point has been lowered by 50%, which means a $2 entry only requires a $1 sell price in order to break even.
It Actually Makes Sense
Some may consider the timeframe to be a bit long but when you factor in a possible bear market it’s almost unavoidable. If prices remain suppressed for some time, bag holders are forced to hold anyway. Sure, you can always sell and buy lower if prices drop even more but at this stage, the market appears very unpredictable. There is also another factor at play here and that is that the project is still in its infancy. Chances are that you invested in CUB envisioning market cap growth and development. This is all still unfolding and becoming a reality slowly but surely.
The market cap is all the way down at $2.5 million, which is not even a blip in terms of market cap valuations. Even if CUB experienced a 10X from this point, it would still be a blip. There is tremendous room for growth.
Even the Crypto market requires patience, regardless of the narratives that get spun on a daily basis in uneducated circles. Depending on your own personal risk tolerance, as a CUB holder, you will have to decide what is best for you. This is merely a perspective that factors in future potential, complemented by the power of compounding.
Thanks for the visit and see you in the next edition.