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Business model in Defi
lately I’ve been talking a lot about the “business model” of Defi projects, “why?”
Defi is a young but already fairly large market that positions itself as a yield generating instrument that’s supposed to compete with stocks bonds the equity market and others
meaning this market is supposed to become a financial tool that investors actually use to make money
accordingly no yield = no investors = no growth
but if you look at the current Defi project models, 99% of them have no real income besides
◆ gas fee commissions
◆ token
that’s not enough for a sustainable project, the problem is that user activity depends on the market, in a bear market it drops and so do the project fees
and token dilution is just a dumb idea overall, you can’t keep diluting a token forever
that’s why now when looking at any project you need to focus on its yield, in the future only those will survive the market, and understand which models actually generate that yield
if the docs or other sources don’t mention any info, that means the yield comes from the two methods listed above
those projects are definitely not worth considering for a long term stable yield
now we’re already seeing projects with sustainable systems, for example @alturax generates yield using 3 market instruments
◆ arbitrage 50%
◆ staking generates 30%
◆ liquidity 20%...

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