Problems with Blur’s incentive mechanism: a large number of wash transactions
Contrast this approach with LooksRare’s original token distribution strategy, which functioned more like DeFi liquidity mining, with rewards being a function of specific market activity.
LooksRare rewards traders based on trading volume, meaning traders can reliably calculate how many tokens (and USD value) they will receive based on their trading volume on a given day.
This resulted in traders performing wash trades in order to receive LooksRare token rewards and resulted in little ongoing organic activity (94% of LooksRare’s historical trading volume is said to be wash trades).
#Binance #ETH #Web3 #BNB #crypto2023
Contrast this approach with LooksRare’s original token distribution strategy, which functioned more like DeFi liquidity mining, with rewards being a function of specific market activity.
LooksRare rewards traders based on trading volume, meaning traders can reliably calculate how many tokens (and USD value) they will receive based on their trading volume on a given day.
This resulted in traders performing wash trades in order to receive LooksRare token rewards and resulted in little ongoing organic activity (94% of LooksRare’s historical trading volume is said to be wash trades).
#Binance #ETH #Web3 #BNB #crypto2023