This summer has seen an incredible boom in DeFi. A phenomenal number of new tokens have entered the market, most of them all chasing the same thing, yield.
The majority of these tokens are designed to incentivize the provision of liquidity. Tokens such as YFI, CRV, and COMP are distributed to users who stake their money in their contracts. They are paid for their contribution to a staking economy.
Most of the yield generated in these systems is calculated in the emission of these new utility tokens. Crazy amounts of yield are quoted, over 1000% in places. As some have pointed out, this isn’t at all sustainable.
“There are sometimes DeFi things that are not very sustainable, right? One big example of this is yield farming. You can often get these really high interest rates… But the problem is that these interest rates are ultimately paid for by rewards explicitly provided by whatever protocol you are using.”
Vitalik Buterin, August 2020
These utility tokens are driven up in price by hype and scarcity, but hype is temporary. When people get bored of whatever meme token is hot, yield will race to zero.
The key to sustainable yield is utility.
CRV provides the ability to trade between stable coins in high volume, COMP incentivizes users to provide liquidity in borrowing and lending markets, and YFI is converging on becoming a decentralized asset management system.
The CML Token integrates with Crypto Millions Lotto, a fully insured Bitcoin lottery with a jackpot that starts at a minimum of $30 million. It is fully built, active, and revenue-generating and is getting bigger and bigger as people all over the world discover Bitcoin.
The CML Token will encourage users to play without buying tickets, allowing them to be part of a totally decentralized lottery syndicate. It will utilize smart contracts to allow people to take a position in a syndicate with a token that equates to a fraction of a free lottery ticket. By buying and staking tokens, holders with have a “Golden Lottery Ticket”.
Syndicates are very common, normally found in office settings, and occasionally on some centralized websites for people playing with small stakes.
Hold the tokens and you get a share of free tickets in every draw. But things get very interesting when people start pooling these tokens by staking them in our syndicate contracts.
Over time our staking pool will play tens of thousands of tickets in every draw and when that starts happening a lot of Bitcoin starts getting won! Instead of specific users winning in the lottery, the contract wins in every draw, week in week out, forever.
All holders need do to collect these winnings is to stake their CML Tokens in the pool. Their share of the staking pool determines their share of the winnings. Simple.
That is a sustainable yield. As long as the lottery exists, there will always be yield generated for token holders. And the lottery has been around for centuries.
The CML Token is the next evolution of the DeFi space where we move beyond the hype and into real digital financial assets that bring genuine sustainable value to the space.
Follow us:
Website: https://cmldefi.com/
Telegram: https://t.me/DeFiCML
Twitter: https://twitter.com/deficml
