Bankless The Secret Weapon of DeFi 2.0 | Zeus from Olympus DAO
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Oct 20, 2021 Discover how Olympus DAO is challenging traditional liquidity mining with innovative protocol-owned liquidity models. The conversation explores the shift from yield farming to sustainable ecosystems, aiming for long-term stability in DeFi 2.0. Insights on bonding, treasuries, and the potential trade-offs of these new systems reveal the complexities of decentralized finance. Plus, hear thoughts on branding as a currency and the community's reaction to the evolving landscape. It's a deep dive into the future of DeFi, packed with revolutionary ideas!
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Liquidity Mining Costs
- Traditional liquidity mining can be costly for protocols, especially those with higher liquidity needs.
- Incentivizing billions of dollars in liquidity requires substantial payouts, impacting profitability.
Owned vs. Rented Liquidity
- Protocol-owned liquidity turns perpetual liquidity costs into a one-time expense.
- This provides lasting value and potentially generates revenue from fees.
Yield Farming and DeFi Summer
- DeFi Summer 2020 was driven by yield farming, where protocols distributed tokens for liquidity.
- However, this model often led to unsustainable farms and mercenary participants.