Can Real Yield Alone Define the Sustainability of a Protocol?

Cool. But what exactly is ‘Real Yield’?

Alright, let’s get into it!

When can ‘Real Yield’ Be A Problem?

Most platforms walk into the gray zone of tokenomics where they try to fulfill token holders demand with higher output — or else they will move funds to the project with the next best APY, causing speculation over governance tokens.

What other metrics and factors to look into when defining the sustainability of a protocol?

Cash flow is undoubtedly the most important aspect to ensure the sustainability of a protocol. But is it the only factor that makes a protocol trusted and relevant among users?

  • If we offer too much leverage and our pool becomes unbalanced, we will increase the cost of leverage to re-balance demand and supply.
  • We expect demand for Leverage to be relatively high, and arbitrage opportunities will exist for those who can exploit them.

Closing Thoughts

Archimedes is an experimental lending and borrowing platform offering a seamless and efficient lending experience for investors. Products like our leverage engine do not rely on Ponzinomic incentive schemes to generate yields. Instead, it utilizes sustainable on-chain revenue streams.

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