Problems
- 1.In DeFi 1.0: Despite the endless opportunities for investors to generate yield, its liquidity mining model is parasitic. Users are always looking for higher APY%, exiting the protocol anytime leading to a huge price drop.
- 2.In DeFi 2.0:Many OHM forks rely heavily on the protocol’s native token price. The issue is that when the market is in a bull market, it creates a very positive feedback loop. However, once the market becomes negative which happens quite often (often outside of the protocol's control due to macro reasons), it has a negative price impact on the token and creates a negative feedback loop, that is absolutely inevitable. It cascades into self-sustaining selling pressure from falling bond sales and staking APY.
- 3.Treasury is not generating sufficient yield for most DAO tokens. The protocols need sustainable incentives for the treasury to grow in the long term.
Last modified 1yr ago