- While DeFi incentives can attract participation and lock in liquidity, they may also lead to short-term speculative behavior. If not carefully designed, these incentives could encourage token hoarding for rewards rather than utilization within the ecosystem.
- Sustainable DeFi incentives should promote genuine ecosystem activity and value creation. It's important that they align with the project's long-term objectives and don't just serve as a tool for artificial token price inflation.
Can DeFi incentives be a double-edged sword for a project's tokenomics?
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