DeFi Yields Built on Token Incentives Are a House of Cards — Here's What Sustainable Returns Actually Look Like
(107 days ago) · 1 source · Summarized by CryptoBipto
Solstice founder Ryan Day argues that sustainable DeFi yields must come from real business fundamentals rather than token emission incentives. Day contends that protocols relying on inflationary token rewards to attract liquidity are building unsustainable models that inevitably collapse when incentives dry up.
WHY IT MATTERS
Imagine a new restaurant that gives away free meals to attract customers. It works at first — the place is packed! But eventually the money runs out, and if the food isn't good enough to keep people paying full price, the restaurant closes. Many DeFi protocols work the same way: they offer huge rewards (yields) funded by creating new tokens out of thin air, but when those rewards shrink, users leave. This article highlights a growing push for DeFi projects to earn real revenue — like fees from actual transactions — instead of relying on unsustainable giveaways. For anyone putting money into DeFi, understanding where your yield actually comes from is crucial to avoiding projects that eventually collapse.
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