UNITE: Why UBOND is a steal right now

UNITE self-funding experiment, 2022-04-02

Day 7:

target/loan: $548.79

todæg yields: $2.78

total yield: $9.66

remaining to goal: $539.13

Hm. I don't know how to say 'you're missing out if you're not buying $UBOND now' without shilling @finance_unite, but there it is.

UNITE asset allocation, 2022-04-02

I like this layout-...ish? I think I'm going to regret not aping in for more $UBOND, but otherwise the balance looks good here.

Tombstone

Okay, let's talk about Tombstone protocols for a moment here, and why I think $UBOND is a steal right now.

Tombstone protocol started with Fantom $FTM when $FTM reached its maximum supply. WAT DO? So tombstoning ('Fantom'? 'tombstone'? GEDDIT?) resurrected the token.

How? By algorithmically pegging another token to $FTM. So: $FTM may not issue more tokens, but now you have twice the supply, both set to the same value of the token. You've doubled your reach of a what-was-thought-to-be a 'dead' token.

The same thing is happening in Harmony, now, and in other blockchains, too. $ONE is by no means 'dead,' but the tombstone protocol still works. You had one token, $ONE, and now you have another one, (in this case) $UNITE, that's pegged to $ONE, algorithmically.

So, 1 $UNITE is 1 $ONE. That's the peg.

What happens when 1 $UNITE > 1 $ONE? The boardroom issue more $UNITE to $USHARE stakers, returning $UNITE to peg.

What happens when 1 $UNITE < 1 $ONE? $UBOND goes for sale: you burn 1 $UNITE to buy 1 $UBOND, returning $UNITE to peg.

Arbitrage

So, that's the key: $UNITE is pegged to $ONE. So, when $UNITE is below peg, an arbitrage opportunity exists, no? 

Yes.

So, I buy $UNITE, a ton of it, wait for it to return to peg, and I've just printed money.

What, then, is my motivation to burn $UNITE to $UBOND, then?

That's the thing. 1 $UBOND is 1 $UNITE ... squared.

So, if an arbitrage opportunity exists for $UNITE right now (it does), then it exists for $UBOND ... squared.

When $UNITE returns to peg, then goes above peg to, say, 1.1 $ONE, I sell my $UBOND at $UNITE-price, squared.

Let's do the math.

I buy, say, 1867 $UBOND ... just for example, because 1867 has NO MEANING WHATSOEVER in relation to my portfolio. 🙄

Then when $UNITE goes back above peg to 1.1 $ONE, I now have 1.1 squared * 1867 $UNITE when I trade back my $UBOND, or 2259 $UNITE.

Conclusion

That's why I buy $UBOND.

"But what if $UNITE never returns to peg, geophf, because nobody ever buys $UBOND?"

Then ... I keep buying $UBOND and sigh when alls y'alls cry: "I SHUDDA BAWT $UBOND!"

I don't know what else to say: tombstoning works, and I'm working it.