EigenLayer, the king of the re-staking track with a valuation of tens of billions of dollars, finally announced its token model early this morning, but it has been subject to huge controversy, mainly because too few airdropped coins were allocated to community users, and most of them were taken away by the project owners and investors. EigenLayer's points gameplay has also been questioned, and even Compound founder Robert Leshner said, "This is the end of the points era. I'm curious to know what will happen next!"
Community user @chudnovglavniy also published a long article, saying that the points system is no longer effective and that the points of many unlaunched projects will soon be worthless. He believes that users will focus on projects that can bring real yield.
Here is what he posted, compiled by Followin :
On “Real Yield Revengeance/The End of the Points Game”.
Over the past 4 months, various token launches have injected ~$8.6 billion of liquid Altcoin supply into the market, and ~$70 billion will be unlocked over the next few years. I predict this Altcoin drama will stop in a few weeks. One day, everyone will wake up and realize that points on unlaunched tokens are worthless. Users will be desensitized to the concept of "points", and the term will disappear as soon as it enters our collective psychological structure. Holders will be in chaos.
Why is the point system not working now? To be honest, the recent market sentiment - in the past few weeks, people seem to be increasingly aware of the fact that the market is no longer providing funds. The ROI of yield farming is falling sharply. Each new TGE is less and less impressive than the last, and I bet we will soon see a wake-up call and public confidence in the profitability of points will collapse sharply. There are too many tokens and no one to take them. People are even too lazy to yield farm.
Projects/tokens that don’t launch will be major failures in the future because no one will be interested in playing the game. It will be too late.
Just like people turn to gold in times of uncertainty, users will start insisting that their earnings are denominated in stablecoins (USDC, USDT, etc.), ETH, or at least liquid shit coin that can be dumped immediately, rather than points. Teams will plead and insist on giving points, but users will no longer accept them. Instead, users will burn their digital points and use it to fuel their digital fires to keep themselves digitally warm, just like in the Weimar Republic.
This marks the end of the points era and the arrival of the era of real yield in DeFi. Real yield are the income you get by generating real economic value on DeFi projects:
1 Earn LP income in AMM, such as @uniswap
3. Short ETH perpetual contracts on exchanges, such as @ethena_labs
4 Loans to the US government, @MakerDAO , @OndoFinance
5 Unsecured Credit Facility Loans, @ClearpoolFin
6. restaking, @eigenlayer
7 Sell option contracts, @3janexyz
In addition, some projects that earn interest on deposits are also worth paying attention to. These projects can bring higher real yield, such as @SolvProtocol . The project's TVL has grown rapidly recently, exceeding US$700 million, and the number of bitcoins on the chain exceeds 10,000. It is also endorsed by well-known institutions such as Binance Labs, Blockchain Capital and Nomura Securities.
In each example, there is a counterparty willing to pay for the service, whether it is a spot trader, a borrower, a leveraged trader, an AVS, or a market maker. Therefore, the yield is real because it comes from actual economic transactions and interactions between market participants, and is not artificially created or maintained.
Forecast for the next 3-9 months:
- I expect that as yield farmers lose confidence in everything else, capital will flow back into protocols that can pay users in-kind in stablecoins or ETH. Protocols that build and deliver real economic value will be rewarded with capital.
- We will also see an explosion of crossover between DeFi and EigenLayer - the most novel source of actual yield is securing other AVS. This will be the new hotness. We are witnessing a Cambrian explosion of crypto-native yield assets enabled by EigenLayer's re-staking primitives. As of this writing, 14% of all staked ETH has been re-staked, equivalent to $14 billion in TVL from native/liquidity re-staking. In 2023, there is actually 1 source of PoS yield - you can stake your ETH on the beacon chain. Today, staked ETH can be re-staked in countless cryptoeconomic systems so that people can earn more by providing security. Specifically, this scales with the number of active verification services (AVS) active on EigenLayer. Therefore, you can have an unlimited number of yield-type ETH variants with different yield/risk profiles.
