Now Trending
What Is Incentive Program? Does the Incentive Program Really Help DeFi?
DefiLearnNewbie
April 14, 2022

What Is Incentive Program? Does the Incentive Program Really Help DeFi?

Have you heard the news regarding some outstanding Incentive Program packages in the digital currency world?

It can be said that the incentive program is an interesting and attractive program for all builders participating in blockchain in general and Defi in particular.

Let’s take a look at some outstanding events!

  • The popular layer 1 blockchain, Celo, has begun expanding its ambitions, having just announced a new $20 million incentive campaign.
  • On the evening of October 12, the world’s largest cryptocurrency exchange, Binance, announced that it will spend an additional $1 billion on the Binance Smart Chain (BSC) growth fund.
  • The Harmony Foundation is allocating over $300 million of the network’s ONE tokens over the next four years to attract blockchain projects and startups.
  • The Algorand Foundation, the blockchain project behind Algorand, has announced the launch of a $300 million Viridis fund focused on the decentralized finance (DeFi) space.

We can see that incentive program packages are being introduced into more and more ecosystems. So this money, what is its purpose? This article will help you understand more about this cash flow and what the Incentive Program is and how it affects the ecosystem.

What is an incentive program?

You can understand “incentive” here to mean any design element of the system that affects the behavior of system participants.

It is done by varying the relative costs and benefits of the choices that the participants can exercise.

These support packages can be from investment funds, the core team of the blockchain itself, or other projects that send money in,…

Motivate builders and projects to incorporate more sustainability and value into the networks and ecosystems they create.

Incentive program’s impact on ecosystems

For the system’s native tokens

When news of the incentive programs was released, the price chart of the native tokens for the next few days was as follows:

  • Celo Network Launches $20 Million Crypto Fund, CELO Price Increases by 50%
  • Terra: Since the announcement of a $1 billion Luna Foundation Guard (LFG) fund to buy Bitcoin as a reserve asset for stablecoin TerraUSD (UST), Terra (LUNA) has been given the strength to bounce back to new highs. Specifically, the price of LUNA increased by more than 40% after 1 day and overcame to create a new ATH with a bounce of more than 60%.

Seeing that support packages for the ecosystem are increasingly popular and include tools to help the ecosystem grow and encourage the development of high-quality tokens, investors have a lot of confidence and motivation to continue investing in projects that address their financial needs. That is shown by the increase in the price of the token as more and more people buy it.

That is also how ecosystems assert their strength in the race to develop funds, the central topic that blockchain platforms are trying to fully exploit in order to strengthen the project’s brand position and attract a large number of people. large users

For ecosystem

Let’s take a look at the total value of the key assets (Total Value Lock) before and after the money is poured in to realize the impact of the incentive program!

  •  Avalanche: From August 18 to September 17, TVL increased by 800% ($312M-$2.66B).
  • Terra: From 9/9-17/9, TVL increased by 22% ($6.93B-$8.15B).
  • From August 30 to September 17, TVL increased 65% ($760M-$1.2B).
  • Celo: TVL increased 27% from August 30 to September 17 ($397M-$700M).

These ecosystems invest in such incentive programs to continue to improve the quality of their ecosystems, thereby meeting the common needs of users and realizing the ambitions of the system. that ecology by creating new pieces. They are willing to pay an unprecedented amount of funding for an incentive program. It marked the biggest step forward in pushing the network further in the DeFi space.

In the future, the decentralized financial system built on this space can attract millions to billions of people from the traditional financial systems in a short time through the Incentive Program. This is an extremely good signal for the crypto space.

See ya in the next article !

Don’t forget to follow useful articles about Crypto Market from team Holding B !!!

Related Posts