Who would not want 3,000,000% APY. Everyone, that’s the answer to your question.
Reddit user Rayjaywolf recently pointed out that 90%+ of high APY DAOs have fallen from their highs. R U Generous is the largest loser, at 99.8%, compared to its $2,041 AATH.
“All high APY crypto DAO’s offering high APY offer crypto DAO’s launched around 2-3 months ago are now dead, have been swept under the rug or show no signs of recovery.”
It’s worse than Rayjaywolf claims. A look at CoinGecko reveals it. The tracking platform shows that R U Generous has fallen 99.9% since its $2,803 AATH.
As always, it is important to be cautious and skeptical about lofty claims in cryptocurrency.
What is the secret to high APY DAOs offering such high APYs and high APYs
There are many variations, but high APY DAOs usually follow the same pattern of mathematical magic to create floating-supply currencies that track the dollar. This is what they call an algorithmic stabilitycoin.
They do this by rebasing token supply. This means that the supply can increase or decrease in accordance with user activity. This is supported by a Treasury system that holds reserves assets and allows “bonding.” Users can then sell assets (such as DAI) to the Treasury to receive discounted tokens.
High APYs can be achieved through the price discrepancy that exists between the token’s current price and the treasury price.
Staking is the final piece. This is where the asset supply is locked away to ensure utility and provide an incentive for demand. Game theory predicts that the high APY staking component will draw more users who will keep the cycle running.
You can use an anonymous team to get an idea of how high APY DAOs work.
Are the Ponzi schemes unraveling?
High APY DAOs are argued by those who believe fiat money is a shared illusion that allows value exchange. They operate in the same way as central banks every day.
Investor confidence is crucial, as was evident in the recent Wonderland scandal, where a senior staff member was exposed as one of the cofounders of the disgraced exchange QuadrigaCX.
Jordi Alexander, Selini Capital’s CIO, comments on OlympusDAO, which is arguably the most famous high APY DAO. He suggests that OlympusDAO’s complexity and unorthodox mechanisms are what caused its demise.
Alexander says that it wasn’t a fraud from the beginning, but an experiment that failed due to the inability to sustain thousands of percent APY.
“I don’t believe it was an outright scam. I think they believed the game theory mechanic would allow it to continue growing and possibly become a significant part of the financial systems.”
OlympusDAO, Wonderland, and other similar companies are still in business. Degen investors believe that the best time for buying is when everyone wants to leave.
High APY DAOs are no longer the future of CryptoSlate.
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