Reward Liquidity Is The Future
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Reward Liquidity Is The Future
A recent trend I've been running into is what I would call a gamified experience with liquidity pools. This to be is the next evolution of what will make your DeFi pool success over others. The reason for this is two years ago we saw a simple copy and paste script that was used by every DeFi platform. It's what caused the explosion of defi platforms, rug pulls and so on because it was easy to create and launch one nearly anyone could do it.
I often call this the cookie cutter phase of a industry where the barrier to entry is so low it opens it up to people who really don't know what they are doing. It often crushes industries and it's what we saw in the defi space.
Since then we are now witnessing these defi platforms of which few survived offer up custom rewards, programing and innovation.
Reward Based
Often I see now staking of the native token of the defi or dex platform and in exchange for staking enough of the native token you get a fee reduction including some defi earnings on the token. This incentive actully causes people to buy up and stake more of that native token and more importantly use that front end defi platform for swaps and trades because of the fee reduction they are getting for having staked enough of the native token (in terms of levels)
Now you have a vested reason to both increase your stake of that native token and also use the application for your swaps and trades because of those lower transaction fees.
Gamefi
Gamefi is a not a new term but it's gained a lot of notice with the introduction of play2earn games that offers up swapping directly in their own application.
We see this more and more in our every day lives. Some call it loyalty rewards such as rewards you get on your credit card. For using their card you get points or cash back which is often small compared to the massive 17% APR they charge on credit card debt.
As you can see these features are already in our lives and they do keep us loyal and using a said platform more than another because of them. It only makes sense that these systems get added into DeFi and start level it up.
Question
Would you be more inclined to us CUB or Polycub more if you got a small reduction in fees for staking enough of the native token?
*This question is more for my curiosity and there are no plans as far as I know to implement something like it.
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I would probably choose CUB over PolyCUB if I was given a choice. As much as I prefer lower transaction fees, I don't like the idea of locked tokens otherwise you get half that much.
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At times instances where we have liquid reward, it at times make the Apr unstable and diminished as time goes on
On Polygon, what fees would be reduced, because they are low enough (although not free)? For this reason, Cub would be my choice. There is of course the question of the worth of the platform token over time. If the price keeps declining (I don't necessarily foresee that), it's not worth staking for the fee reduction.