Goose Finance: Layered Farming Works If You Can Read

Layered farming is an automated burn mechanism to reduce the inflation of EGG.

(note: below is entirely my opinion. I’m not paid by Goose and do not represent Goose)

This is an essential feature to reduce EGG inflation.

Some 20,000 EGG tokens are minted each day. At a price of $20 a token, that represents a value of $400,000 being minted. Should all 20,000 EGG tokens be sold, that means a buying pressure of $400,000 needs to match those new EGG tokens each day.

This is an enormous feat, and one point of FUD about the project. Inflation is a real problem for anyone trying to hold this asset. But this is why layered farming is so vital.

Layered farming burns EGG through the incubator system. Incubators reward minted GGX tokens.

The current layer 4 had a 50,000 incubator with a 20% burn. That represents at least 12,500 EGGs burned.

Another 50000 incubator has a 10% burn. This burns off about 5555 EGGs.

An additional limitless incubator has a 2% burn.

In total each layer, with incubators at full capacity can burn off 18555 EGGs about. Of course more are burned.

If we are lucky, each week of layered farming burns off about one day of minted EGGs.

Future developments like the vault, lottery and the AMM will continue to burn off EGG.

I state all of this to emphasis the important role that layered farming provides. The function is to burn eggs. It is not meant to create a viable long term token. GGX is designed to burn eggs through the incubators.

The rationale for burning eggs, essentially paying a fee to harvest a token, is to make a profit. There are two ways to do this.

Either you incubate and then sell your GGX immediately, or you stake your GGX in the house and earn BUSD.

Both of these avenues require money to be available to prop off the price of GGX and withstand selling pressure. GGX comes out of nowhere. There needs to be liquidity to sell and set a market price.

This money comes from two places: liquidity pools or the Goose Finance team itself.

All of this information is in the documentation and readily available. I mention this because it should not even be necessary to explain something that can readily found elsewhere. But it is important to clarify all of this to understand the liquidity question.

Liquidity is essential to the entire operation working as designed. Liquidity, money, does not appear from a magical place. Either LP farmers provide it or the team does.

How can the team create a mechanism to, weekly, provide $150,000 BUSD for the GGX house in addition to the GGX pool? We are talking about a quarter of a million dollars offered to participants, weekly.

As people purchase GGX, the team pulls their initial liquidity. This fuels the majority of the House fees and provides the essential utility of GGX: attract buyers and burn EGG.

But, you will say, they take more than they need. They make a profit!

This particular news point emerged with a fall in EGG price and a number of burned APEs who didn’t bother researching before buying the top of a $1000 token then held it down to $0.30. 

“Scam!” they shouted. “They took profit like a rugpull!” 

The telegram for Goose filled with hundreds of people like this, many of them likely bots, that helped crash the price from $100 to a recent low of $15. 

This reflects a childish notion of how a business can operate. Capitalism dictates profit or death. Cryptocurrency, stocks, markets, are all zero sum games. All winners hold the money of the losers. Goose needs and is entitled to profit, and I challenge anyone to say they wouldn’t take profit in their shoes.

A liquidty farmer provides liquidty to profit.

A holder wants to sell their token to a buyer at a higher price.  As with a stock broker, a home owner, and you when you bought the GGX top without bothering to read anything that could inform you why it is supposed to decrease in price, hoping to flip it to someone else.

If Goose never took profit they would not be able to operate and the project would die.

If Goose did not pull liquidity they would quickly run out of funds needed to provide liquidity for each weeks layer.

GGX is a gamble, a casino, where market participants decide if they will stake a quickly depreciating asset for BUSD or immediately sell to recover burned EGGs. The later CREATES BUYING PRESSURE for EGGs.

Layered farming works. It burns EGGs, forcing many to buy EGG before breaking even and taking profit. There are winners. There are more losers, 95% of which have no idea what they bought and why.

No one is forced to participate. Everyone can safely nest eggs for 0.6% daily rewards. No one is forced to participate. Everyone who participates has made the decision to do so and any and all losses should be in their shoulders, because that’s what it means to be an adult.

Goose pulls liquidity and provides a substantial amount in the House. They take profit because it’s their right to do so.

Layered farming works. Can it be better? Yes. It is an innovative mechanism. The largest problem with it is not the burn rate or market forces. The largest problem is that people don’t read, recklessly gamble their funds, then demand their money back.

Sorry. Welcome to crypto.

Learn more at Goose Defi. 
https://www.goosedefi.com