Why crypto prices and dex/yield farm tokens are so unstable:
DeFi has used tokenomics on DLT with little economic efficiency and less real-use viability.
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“Emissions” are only rewards if tokens have value, digital assets are “ethereal” and do not require physical work (or mining) beyond what a developer requires. However, the principle of supply and demand is real.
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Halving-supplying events are unstable & unnecessary, causing valuation-system shocks that encourage and discourage group demand with no underlying reason beyond multipliers.
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Extreme supply amounts that do not reflect potential token holders are unstable and fuel higher or lower demand by creating misperceptions of value.
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Rewards provided for unnecessary technical prerequisites (i.e. computational mining) and/or usage (gas) fees, inhibit DLT growth and misallocate real resources.
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A schedule of reward distribution set beyond several weeks cannot take into account the future.
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Algorithmic determinations of the future probability of an outcome occurring in socio-political economics are not developed enough to exceed the collective cognition of an educated collective of people.
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Reward for participation is real, and must align with growth and equitably compensate participants for their contributions.
A DeFi-DAO tokenomics system must ensure that the objectives are achievable, and by design the system will automatically achieve its goals.
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