To me this is the biggest invalidation of the thesis that fee capture today actually matters.
So long as DeFi protocols have 100x+ growth ahead of them:
Growth > Fee Capture.
1/
So long as DeFi protocols have 100x+ growth ahead of them:
Growth > Fee Capture.
1/
https://twitter.com/fiskantes/status/1353984416222244865
Along this line of thinking, even if a token does implement some kind of fee capture it’s much better to reinvest those earnings rather than distribute as dividends.
UNI implicitly does this by not extracting fees from LPs (fee switch off).
UNI implicitly does this by not extracting fees from LPs (fee switch off).
This industry’s obsession with dividends is a backlash to the useless utility tokens from 2017.
Yes it’s important for tokens to have the potential to accrue value.
But earnings potential is not the same as dividends.
Yes it’s important for tokens to have the potential to accrue value.
But earnings potential is not the same as dividends.
That said it is ideal if a token is designed from the ground up to be an integral part of the protocol and rewarded for being so.
It removes the future risk of attempting to jam new governance token economics into the economy of an already successful protocol after the fact.
It removes the future risk of attempting to jam new governance token economics into the economy of an already successful protocol after the fact.
But who knows how big that risk is at this point.
Even though we have early winners, it’s still very early and there’s still no winning playbook for how to create and capture value.
Even though we have early winners, it’s still very early and there’s still no winning playbook for how to create and capture value.
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