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The enormous growth of the Decentralized Finance (DeFi) sector in recent years has captured the attention of crypto users and the traditional finance sector.
DeFi is considered to have considerable potential in regards to revolutionizing the financial sector and eliminating intermediaries.
Nonetheless, the DeFi sector is still at its early stages and suffers from a myriad of problems that limits widespread adaptability.
At present, one of the biggest problems in the sector is inflation coupled with markets' pump and dumps. To fulfill its full potential, the sector needs to solve the problem of inflation resulting from the continuous issuance of new tokens.
Fortunately, there are new platforms in the DeFi sector that look to resolve most of the crucial problems facing the sector. Platforms such as DYP.Finance, Yoink Netowork, or other pioneers have significantly contributed to streamlining the DeFi sector.
Another outstanding platform in the DeFi ecosystem is DefHold-a non-inflationary DeFi ecosystem seeking to fight inflation in the DeFi sector. Here's an in-depth look at how DefHold combats inflation in the rapidly growing DeFi sector.
Inflation is a significant problem in the rapidly expanding DeFi sector. As DeFi platforms expand to accommodate new blockchain networks, more and more DeFi protocols are being launched each day. The increase in the number of DeFi protocols, each issuing their tokens, detracts from the total market liquidity.
As a result, existing DeFi tokens lose their value rapidly, causing investors to sell their assets rapidly. Inflation in the DeFi sector also causes market dumps. As noted above, the issuance of new DeFi tokens decreased DeFi tokens' value already in circulation.
Most traders in the DeFi sector usually leverage arbitrage trading where they buy tokens low and sell high. Therefore, a rapid drop in the value of tokens causes a sudden sell-off, i.e., market dumps, leading to a drastic decrease in a project’s value.
Most investors cannot hold on to their tokens in market dumps due to a lack of incentives resulting in increased sell-off and a substantial drop in a token's value.
While most investors secure their digital assets in market dumps by leveraging stable coins that can later be farmed or staked on various DeFi platforms that generate yields on underlying assets, this method lacks incentives, and it's quite cumbersome as it's speculative.
DefHold is a non-inflationary DeFi protocol that seeks to offer yield generating investment strategies designed for long-term crypto holders in both markets’ pump and dump.
DefHold employs innovative automatic yields to generate solutions to offer crypto holders with precise portfolios and liquidity management to ensure their assets retain value in market pumps and dumps.
In summary, the platform leverages a non-inflationary staking and farming system to reward users for HODLing onto their tokens.
Its ecosystem encompasses multiple yield generating mechanisms that compensate investors for holding tokens during a market dump or pump. As such, crypto investors can secure their assets during markets' pump and dump without having to use stable coins.
DefHold fights both inflation and markets' pump and dumps by leveraging a unique mechanism involving non-inflationary staking and farming revenue streams.
As mentioned earlier, the platform implements autonomous yield generating mechanisms where token holders are encouraged to stake or farm their assets into pools with various predefined lock-up periods.
Token holders who withdraw their assets before the lock-up period expires due to market moves fears or liquidity requirements are charged an early withdrawal fee (EWF).
The charged EWF serves as a revenue stream to incentivize token holders who have managed to hold on to their portfolio and liquidity requirements during market falls.
In addition to the EWFs, which is shared equally among token holders, farmers and stakers on the platform are also incentives with the 2% transfer fee charged on every DEFO token transfer.
In doing so, DefHold prevents markets' dump and pump in the event of a bearish market. DefHold also prevents inflation in the DeFi space by capping its token, i.e., DEFO at 12 000 DEFO.
By capping DEFO supply, the platform ensures that the token becomes scarce with the progression of time. Capping DEFO total supply guarantees token holders that an infinite supply increase cannot inflate the market price.
Also, to maintain high liquidity levels in the DeFi ecosystem, DefHold allocates 75% of the raised ETH together with 19.50% of the DEFO tokens into Uniswap liquidity pools. The tokens are locked permanently using LID smart contracts, ensuring that token holders earn lucrative returns on their holdings.
To further streamline the DeFi ecosystem, the platform has developed two innovative products set to be launched before Christmas.
The two revolutionary products are the Early Withdrawal Fee (EWF) pools and a Whale Club for investors seeking enormous buying power. These two new revolutionary products prevent inflation and markets' pump and dump plus enhance investors' return on investments (ROIs).
EWF Pools actualizes the concept of liquidity staking but to a better extent. A liquidity pool essentially involves locking up funds, i.e., staking for a set period to bolster a platform's liquidity. Stakers then receive rewards based on the staked amount, the type of coin, and the pool they stake in.
However, the EWF pool is quite different from other staking pools as it allows investors to access their tokens before the predetermined period expires. Nonetheless, they are required to pay a certain amount of fees, which is channeled back to the liquidity pool.
Both the fee and the interest earned from the pool is split amongst the remaining investors. EWF Pools is an innovative way of eliminating inflation in the DeFi sector and compels investors to adhere to their staking strategies.
Whale Club is the other new product from DefHold that seeks to improve investors' ROIs by allowing investors to attain additional buying power. The Whale club is composed of vaults that are designed to offer higher returns by enabling investors to access higher buying power.
Each of the vaults in the whale club has minimum balance joining requirements and a minimum market cap of the underlying assets. The Whale Club will revolutionize the DeFi sector by offering investors an opportunity to buy more power enabling them to be majority holders in a particular project to their benefits.
Inflation and markets' pumps and dumps are significant issues facing the DeFi sector. DefHold is a revolutionary DeFi platform that seeks to curb inflation and both markets' pump and dump by incentivizing token holders to hold on to their investments regardless of the market condition.
This non-inflationary DeFi platform leverages several deflationary protocols to ensure investors' holding retains value even in the phase of bad markets. The anticipated launch of two products is set to make the platform even better in tackling these issues.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect Crypto Adventure’s position. The analysis performed within this article is only for educational and informational purposes. The author of this post may or may not own Defhold Tokens.
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