# 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.&#x20;
2.  In DeFi 2.0:&#x20;

    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.&#x20;
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.
