Be Careful with Inflationary DeFi platforms.

When you stake your Defi-Tokens for

  • delegating validators
  • governance
  • share of the transaction fees
  • network security
  • rewards (annual interest)

Rewards are usually paid in the native erc-20 network currency that you used for staking. For example : Joe buys 10,000 Kava, his reward for staking are paid in Kava. The biggest issue I have with this ”bagholder loyalty points program” is the fact that :

ERC-20 testnet tokens that work with smart contracts can be altered through few lines of code.

inflationary block-rewards.

The initial total supply for Kava was 100,000,000 Right now it’s 106,274,714… where did the extra 6,274,714 come from? Let’s check out their telegram.

”increasing with inflationary block rewards each block?”
  • So the annual rewards for staking aren’t deducted from the total supply, but instead new supply is minted?
  • So the interest that Kava pays to stakers is less than what is lost by inflation? I haven’t bothered to do the math because there is a chance I will get banned from their telegram when I ask critical questions.

13% of the total supply in circulation

Total supply of Kava is ever increasing but only 13% + inflation is being traded right now.

Trends are nothing more than supply imbalances – demand greater than supply = uptrend. Kava is trending because the circulating supply is capped at 13%. Low Supply – High Demand… buy orders are literally cutting through the orderbook as a result we see 500% Parabolic spikes.

You can already guess what will happen when the other 87% of the total supply become fully unlocked.

I am going to receive so much hatemail from this…. greater-fools might go private. Members only.

Always check for circulating supply vs total supply. Demand isn’t a constant, it’s a variable it changes from season to season. Not every DeFi project is a scam. Some projects have massive massive potential and are undervalued, not going to disclose which projects I’m currently buying.

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