H2O Moves Toward More Sustainable Yields
A new era of sustainable yield is among us. The concept of “real yields” brings users the possibility to now benefit from more sustainable yield sharing.
Prioritizing long term value over short term yields is the whole point of sustainable DeFi, yet, value is often being overlooked. Some products are overhyped and promise users with high yields, which are unsustainable without a good business model. So how are other DeFi projects changing the narrative? Real Yield.
What is ‘Real Yield’?
Redacted Cartel (BTRFLY) and GMX are prime examples of DeFi protocols pioneering ‘real yield’.
Redacted Cartel
rlBTRFLY (revenue locked) has recently launched where users can now lock BTRFLY for rlBTRLY to earn rewards distributed in ETH. rlBTRFLY receives revenue from Redacted’s treasury earnings and from Redacted’s ecosystem of products. Here’s a breakdown of what rlBTRFLY holders:
- 50% of Hidden Hand’s revenue goes to rlBTRFLY holders.
- 42.5% of Pirex’s revenue goes to rlBTRFLY holders.
- rlBTRFLY’s percentage of revenue from the treasury
GMX
GMX is a decentralized perpetual exchange with up to 30x leverage. Protocol revenue is generated on fees from swaps and trading. There are two tokens that create the GMX’s ecosystem: GMX, its utility and governance token, and GLP, the liquidity provider token. 30% of the fees from swaps and trading are converted to ETH / AVAX and distributed to GMX stakers. GLP token holders earn Escrowed GMX rewards and 70% of platform fees distributed in ETH (for Arbitrum) or AVAX (for Avalanche).
Both of these models are entirely different from most traditional DeFi protocols where it has been a common trend to provide yields in the form of inflationary tokens to bootstrap liquidity and growth. This has often led to tokens being farmed to oblivion resulting in price falls as users rotate their assets to new protocols for better yields.
‘Real yields’ have set the trend for a new source of revenue which is clearly identified. It’s a more sustainable business model that fosters true value for its users.
How H2O is Shifting the Tide
H2O has recently published its new roadmap (v2) introducing a strategy to include staked data-economy assets its first staking wrapper for veOcean. OCEAN holders can lock their tokens using the psdnOCEAN contract, which will lock Ocean in veOCEAN for the maximum lock period, increasing the revenue and removing a maximum amount of OCEAN from circulating supply
psdnOcean stakers hereby gain access to a share of the revenue of the veOcean locked by psdnOcean and revenue generated through allocation of veOcean in Data Farming. In addition, stakers can vote on how veOcean locked through psdnOCEAN is allocated within Data Farming.
H2O protocol is planning to add support to even more liquid staked wrapped tokens in the future, creating a positive flywheel for the whole data economy.
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