The Fine Line of Decentralized Liquidity Incentives in Early-Stage Crypto Projects
Decentralized liquidity incentives are all the rage these days in the crypto space. They’re seen as a way to attract investment, increase market participation, and boost liquidity. But, as with many things in crypto, it’s not all sunshine and rainbows. For early-stage projects, these incentives can be a double-edged sword that brings both opportunity and risk.
What Exactly Are Decentralized Liquidity Incentives?
What are we even talking about here? Decentralized liquidity incentives are designed to attract users to provide liquidity to trading platforms, particularly in decentralized finance (DeFi). Often, they come in the form of token rewards. Theoretically, they should attract both short-term and long-term investors. In practice?…
