Thread by @Rentahomefast

Are these yields on @THORSwap sustainable?

2/ Well lets get into the data on how the yield is generated.

Just like all yield farms a certain number of tokens are allocated to a given pool regardless of price, so the more people that deposit they less tokens you get.... so the lower the apy? right?

3/ yes and no
*remember apys are based in rune price
so 10$ rune price paying 10% apy
will pay around 20% apy if rune price goes to 20$

......wait why does the rune price have to go up???

4/ remember the formula for every 1$ deposited it juices the rune MC by 3$.....find out more here

https://twitter.com/Rentahomefast/status/1501329870260826114

5/ so as more people deposit it juices price of rune, which juices the apys
which also attracts more traders and gives swap fees to LP Providers (boost apy)
then higher apys attract more LP, with more LP juices price of rune, which attracts more traders (boost apy)....

6/ I think you see the flywheel

liquidity attracts traders and traders attract liquidity

.....

what to see more threads like this check docs.google.com/spreadsheets/d…

if you enjoyed this thread share it with a Defi addict near you

https://twitter.com/Rentahomefast/status/1504956061815656453

#thorchain #rune #raisethecaps
#thorswap

also bear in mind....this does not mean the apys will stay the same but there is a flywheel in place that will help stabilize the yields NFA