Everything in DeFi moves at a ridiculously fast pace. People expect the world to change overnight, contracts to be written in minutes and APY to increase in seconds.
With Cub, we started a base layer platform that we could build upon for months and years to come. It grew faster than expected and the expectations for rapid releases mounted.
For the past 6 weeks, we've been building a number of massive updates for Cub and LeoFinance. Rather than tackle some small improvements and roll them out quickly, we decided to go after some of the biggest issues in the DeFi / BSC space.
LeoBridge is tackling the biggest issue with BSC right now: how to move capital from ETH to Binance Smart Chain.
To solve this, we built a backend and front-end designed for permissionless cross-chain swaps. Allowing anyone to swap any ERC20 token into any BEP20 token via smart contracts and the LEO token economy.
Along with LeoBridge, we've designed, built and are about to release Kingdoms - a feature that will allow Cub Finance users to pool assets in Kingdom vaults. Kingdom vault contracts then pool those assets on platforms like PancakeSwap, Venus, Ellipsis, etc. and then utilize the rewards of those platforms to reinvest in the base asset pair + earn harvestable CUB.
Coinciding with LeoBridge and Kingdoms, we built Cub Finance V2. A new UI that will handle all of these new features and allow us to build the next features to come.
LeoFinance is also getting a UI refresh with a new mobile version, Notifications feature and more. We'll save that for another post.
It's been a wild journey getting to this point and 6 weeks have felt like 6 months. We've got a lot of developments launching this week that have taken countless hours to create. As this week continues, you'll see us release all of the incredible new features we've designed, built and envisioned since this all started.
Rather than be any other BSC yield clone, we want to build things that are unique and solve massive problems in the space. CUB is a long-term project and most people look at these things through a short-term lens. Stay tuned for massive developments this week and the announcement of our roadmap of new CUB developments that are yet to come 🦁
Introducing LeoBridge - Permissionless Cross-Chain Swaps
Throughout the process of building and launching CUB on the Binance Smart Chain, we realized that one of the most demanded apps is a permissionless asset bridge from ETH to BSC.
As of now, there are few ways to bridge ERC20 assets to BEP20 assets. A lot of dev activity and capital has migrated to the Binance Smart Chain. This is not to say that ETH is any less valuable, only that BSC provides a much more user and developer-friendly playground for DeFi applications that require a significant number of transactions (i.e. the Cub Finance DeFi app).
Permissionless Cross-Chain Swaps
We're excited to finally launch LeoBridge - our solution to permissionless cross-chain token swaps. LeoBridge will launch in a multi-phase process that coincides with swap caps as liquidity and usage deepens.
Getting LeoBridge to the form you see today took several iterations both on the frontend and backend. The original idea was to integrate a simple swap UI into the existing Cub Finance app but that idea was scrapped mid development.
After going back to the drawing board a few times, the Uniswap UI was chosen and forked to create the UI you see today. LeoBridge is now a standalone application, although inherently tied to the Cub Finance platform through menu links, branding and swap fees.
As we move into LeoBridge Phase 2 and beyond, you'll see this UI change drastically to handle more blockchain asset conversions while maintaining a clean and simple UX.
How it Works
LeoFinance has a unique tokenomic structure. We have 3 tokens that represent LEO:
- Native LEO (Hive Blockchain)
- Wrapped LEO (Ethereum Blockchain)
- BEP20 LEO (Binance Smart Chain)
Wraps can be performed instantaneously for minimal fees across these 3 versions of LEO. This allows our users to do some interesting things like participate in ETH-based applications and seamlessly unwrap assets onto the Hive blockchain and then rewrap LEO onto the Binance Smart Chain to participate in Cub Finance or other BSC dApps.
Utilizing this tri-token economy, LeoBridge allows users to swap any ERC20 token into any BEP20 token using smart contracts that interact with wLEO (ERC20) -> LEO (Hive) -> bLEO (BEP20).
LeoBridge offers a seamless way to convert ERC20 assets into BEP20 assets. It's the most unique cross-chain bridge setup we've seen.
- Users simply enter an ERC20 input on the LeoBridge UI
- Enter a BEP20 output
- BSC receiving address
The UI shows approximate send / receive amounts after slippage and swap fees are calculated.
Like any other DeFi app, a token approval TX is required before any swaps can occur for a specific ERC20 asset. Once approved, the UI allows the user to swap that token into any desired BEP20 output.
Once the user clicks swap, they're prompted to send their ERC20 asset. From there, LeoBridge smart contracts handle the rest until it delivers the BEP20 asset to the user's wallet.
On the backend, LeoBridge follows a process that looks like this:
ERC20 Input -> wLEO -> LEO -> bLEO -> BEP20 Output
From the User's perspective, this is a simple swap page like any other AMM. On the backend, LeoBridge is handling the swap by:
- Taking the ERC20 Input
- Swapping it for wLEO
- Unwrapping wLEO into native LEO
- Rewrapping LEO into bLEO
- Swapping bLEO for the chosen BEP20 Output
Fees and Burn Revenue
LeoBridge will calculate slippage / fees for this cross-chain swap. The Binance Smart Chain side of this mechanism is much cheaper relative to the Ethereum side of the swap mechanism. Depending on the time of day, gas fees on Ethereum can be relatively expensive.
LeoBridge doesn't side step these gas fees. Instead, it offers a way to seamlessly get assets from ERC20 to BEP20. For many users, this may be the last ETH gas fee they ever pay as moving assets to BSC and remaining there for the forseeable future makes the most sense.
Outside of slippage and gas fees, LeoBridge takes a 0.25% swap fee. This swap fee is sent to the Cub treasury and 100% of the fee is utilized to buy/burn CUB and bLEO using the same structure as Cub Finance vault revenue.
- 80% of the swap fee burns CUB
- 20% of the swap fee burns bLEO
At launch, we've enabled a $3,000 swap cap. We will regularly raise the cap to allow for larger and larger swaps as the bridge matures and wLEO and bLEO gain more liquidity pool depth.
LeoBridge is an incredibly long-term project. Our intention is to service ERC20 -> BEP20 swaps now and continually add new protocol support for other blockchains in the future. A multi-phase launch with continuous swap cap raises is our path to achieving this over the coming weeks and months.
Trading Volume and Liquidity Providers
In phase 1 and 2 of LeoBridge, 2 liquidity pools make bridge TXs possible:
- wLEO-ETH (Ethereum Side of the Bridge)
- bLEO-BNB (BSC Side of the Bridge)
As of launch, wLEO-ETH has $1.6M in total liquidity and bLEO-BNB has $1.5M in total liquidity.
All swaps through LeoBridge are handled via the wLEO and bLEO liquidity pools. When an ERC20 is swapped for a BEP20, it is first swapped into wLEO, unwrapped and rewrapped into bLEO. That bLEO is then immediately swapped for the chosen BEP20 output.
In the user's eyes, they never really owned LEO through the life of the bridge trade. They are not exposed to the price movement since the bridge TX immediately unwraps and rewraps their swap value and converts it into the BEP20 output.
LeoBridge slippage is based on the depth of liquidity in each side of the bridge pool. The ETH side and BSC side have almost identical liquidity right now and allow for mid-sized swaps with low slippage.
We believe that the maturity of LeoBridge will coincide with the rapid increase in depth seen on the wLEO and bLEO liquidity pools.
In order for LeoBridge to be viable in the long-run for large Bridge TXs, we need to see the $ value of liquidity pool depth increase drastically. This happens when:
- More assets (wLEO & ETH, bLEO & BNB) are added to the liquidity pools
- The value of assets in the liquidity pools increase
LP Rewards, Trading Volume and Bridge Fees
There is an inherently positive feedback loop for LeoBridge and the liquidity pools on either side of the bridge: as assets are converted, trading volume occurs on both sides of the bridge. This trading volume increases LP rewards via normal LP swap fees. This attracts more liquidity which increases the swap cap and allows for more/larger Bridge TXs.
Bridge TXs also generate Bridge fees which are used to buy/burn CUB and LEO, creating inherent demand and value for LEO as the Bridge gains adoption. In other popular DeFi projects, deterministic value is used to describe built-in value mechanisms that can be used to determine a base value for an asset. We believe a similar phenomenon will take place as LeoBridge gains adoption and expands to support a multitude of popular blockchain protocols.
ERC20->BEP20 is just the beginning of what we can do with LeoBridge. One of the core values of LeoFinance and Cub Finance is interoperability.
We want to serve as a bridge to all major blockchain protocols and allow our users to seamlessly access the top dApps and cryptocurrencies in this space now and in the future.
We believe that ERC20 -> BEP20 is a killer feature due to the current status of trying to swap funds from Ethereum to Binance Smart Chain but we also believe that this is just a glimpse of the future of cross-chain swapping.
The future of LeoBridge is in seamless cross-chain swaps and interactions with all major blockchains and cryptocurrencies. Every swap will bring in the 0.25% swap fee and burn both CUB and bLEO.
Multi-Phase Release Schedule for LeoBridge Support:
- Phase 1: #ERC20 -> #BEP20 token swaps ✅
- Phase 2: #BEP20 -> #ERC20 token swaps (Q2, 2021)
- Phase 3: #BEP20 -> $HIVE (and vice versa) (Q3, 2021)
- Phase 4: ERC20/BEP20/HIVE -> native #BTC, #ETH.. via $RUNE mainnet (Q3-4 2021)
In this early stage of LeoBridge, the Swap Cap has been set to $3,000. This cap will be raised as Bridge TX volume increases and liquidity pool depth for wLEO and bLEO increase as well.
Find LeoBridge on the Cub Finance UI or at https://bridge.cubdefi.com
Phase 1 of the bridge handles ERC20 -> BEP20 swaps. We'll roll out the additional features of the bridge according to our roadmap. Smaller iterations between each phase will include things like custom token addresses, ETH native swaps, progress bar for the life of a TX etc.
Our work thusfar has gotten the key infrastructure of LeoBridge built. From here, we'll make rapid and regular improvements as we get feedback, consider new features and ultimately build toward our goal: servicing the massive void that exists in the market of trying to transition capital from blockchain to blockchain. Starting with BSC to ETH and expanding beyond.
In Other News, today we deployed our final version of Cub Kingdoms. The final step is to start our CertiK auditing process and then update our UI to Cub V2. Earlier today we tested Cub V2 and discovered some visual issues. We rolled back the UI update and expect to have it back online in the next 24-72 hours.
Update: CUB UI V2 is now live and Kingdoms have been added to the site. Our new vaults will open VerySoon™️
Over 6 weeks of development has culminated to this week. We're excited to bring a new era of features and rapid improvements to CUB now that this key infrastructure has been built and the bricks have been put in place for the long future ahead for Cub Finance.