Original author: block chain institutional investors Pantera Capital Partners Paul Veradittakit
Translator: Lu Jiangfei
At the beginning of this year, Compound was the first to introduce the concept of “governance tokens”, and income farming also emerged. Crypto users only need to provide liquidity to obtain incentive income based on the platform’s native tokens. The DeFi platform that provides token rewards hopes to pass the product , Use cases, and other rewards/incentives to attract new users and retain old users. In the so-called “post-compound era”, Ampleforth is one of the first projects to provide liquidity rewards through Uniswap and other DEX.
Soon after, more and more DeFi fork projects began to appear. Since the code of most decentralized projects is open source, for those DeFi projects that copy the code under the “new brand”, they may want to push the product in another direction and/or change the original agreement. Economic/cap table, some of the DeFi fork agreements/projects that have attracted more attention in the industry include:
- Sushiswap forked from Uniswap
- Swerve forked from Curve
- The “Ice Cream” Cream branched from Compound and Balancer
Generally speaking, DeFi fork projects will always take away part of the liquidity of the original protocol/project, but some projects are very “strong”. As we have seen, the community gave huge support when Uniswap launched its native token. In fact, the team, product, and trust are still very important to DeFi. Once the initial reward provided by the fork project ends, the liquidity and revenue will return to the original agreement/project.
For DeFi projects, the most critical question is whether it can still attract users after the initial reward ends?
For now, we have seen a strategy that is: instead of distributing rewards in a one-time manner, we must design a token release schedule (for example, gradually release within six months) and gradually distribute token incentives To the user.
At the same time, we have also seen another trend: non-fungible tokens (NFT) and many innovative DeFi projects have emerged in the game industry. NFT is an encrypted token that can uniquely identify an object, such as a crypto kit. Both NFTs and games hope to attract user participation through innovative products, allowing more users to hold and use platform tokens, thereby preventing the loss of liquidity and the decline of tokens/prices.
One game worthy of attention in the crypto market recently is Yield Wars. Like other game platforms, Yield Wars provides users with the native token WAR. As long as the liquidity is provided, there is an opportunity (in the form of WAR tokens) to obtain income. If users do not provide liquidity for income farming, they can also purchase tokens directly on Uniswap. After obtaining the tokens, you can invest the WAR tokens into the ETH/WAR liquidity pool on Uniswap to obtain an annual interest rate of about 2200%, or put the tokens into the daily reward battle.
How to “fight” in Yield Wars?
In fact, you can participate in the “battle” every day. The game time starts at 9 am Pacific Standard Time (PDT) and ends at 8 am the next day. Your task is to choose the winning “token army” in the two games. The selection criterion is based on how many votes these “token army” get from voters, who will pledge their holdings Tokens, if the number of collateralized tokens is larger, the chance of winning will be greater.
In each “battle”, the winning “token army” will take 50% of the loser’s profit. Yield Wars provides token rewards every day. These rewards are distributed proportionally and depend on whether you win or lose. However, players can only vote once a day, and the earlier they vote in the “battle”, the more rewards they will receive. At this stage, the annual interest rate of the token incentive provided by Yield Wars is about 2000% (the actual interest rate depends on factors such as voting time). WAR tokens can also help users further realize the decentralization of the “battle” platform, because users can vote for different teams and determine the development direction of the product. If you want to learn more about the Yield Wars “battle” platform, you can visit its official blog post.
In the future, we will see more platforms that mix games and liquid mining. It will be very interesting to observe whether these platforms can retain users and create sustainable economic models. In fact, these hybrid gaming and liquid mining platforms developed from the early income farming model, which shows that the founders and users of DeFi projects have become smarter and more adaptable to industry development.
