Vladislav Sopov
The MuesliSwap DeFi protocol introduces a whole new yield farming mechanism: the larger the pool, the higher the APY it offers to investors
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- MuesliSwap reveals organic APR: returns grow along with staker count
- “Emissions are capped”: MüsliSwap team addresses concerns
The first-ever decentralized cryptocurrency exchange (DEX) on the Cardano and Milkomeda platforms, MuesliSwap, proposes a new concept to make yield farming more attractive and sustainable in a declining market.
MuesliSwap reveals organic APR: returns grow along with staker count
In an announcement by the MuesliSwap team on December 6th, 2022, the concept of the organic APR was presented to the enthusiasts of the community. In general, as the number of individuals contributing to the pool increases, the APR may increase.
We have developed something special for you! Organic APR 🌿🧑🌾
We present the organic annual percentage rate in one sentence:
The more people contribute to a pool, the higher the APR 💰📈
why do we need it And how would that work? See this thread for more information. 👇
— MuesliSwap (@MuesliSwapTeam) December 6, 2022
According to the announcement, the new concept is intended to address the problem of fair distribution of returns. For the vast majority of DEXs, the APR for early risers is falling as more DeFi enthusiasts join this or that pool.
As such, DeFi yields are vulnerable to inflationary processes, leaving the earliest members of the yield farming processes with no incentive to invite the next generation of users.
To resolve this discrepancy, MuesliSwap proposes the concept of “Organic APR”, which is designed to increase APY rates along with the increased number of players. For example, if a pool reaches 500,000 ADA in TVL, its players can enjoy an APR of 7.3%. If the pool’s TVL scales 10x, the APY also increases to 73%.
“Emissions are capped”: MüsliSwap team addresses concerns
While the majority of MuesliSwap enthusiasts appreciated the new concept, some of them were skeptical and felt that the full scheme would deplete the LP token reserves.
To address this controversy, the MuesliSwap developers made it clear that the overall issuance level will be capped:
More participation = faster outflow. But the emission is limited. The maximum emission is never exceeded and can give a minimum (!) duration for yield farming. Displaying the remaining reserves transparently + providing an estimate based on the current APR could be another option.
As previously reported by U.Today, major DeFis on Cardano (ADA) saw an influx of new users following the activation of the Vasil hard fork.
MuesliSwap, the segment’s flagship protocol, saw a 788% increase in user count in just a few weeks.
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