Unraveling Losses, A Painful Lesson from the DeFi Rollercoaster
14 hours ago
As I continue my journey, peeling back the layers of losses in the unpredictable realm of crypto, one particular experience with DeFi stands out vividly in my memory.
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It was early March 2022 when METF, a seemingly irresistible project, made its debut on the Cronos chain. Like a teenager enchanted by the allure of a new crush, I found myself swept off my feet, falling headfirst in love with the promise of this revolutionary endeavour. Let me take you through my journey, and perhaps you won’t blame me for succumbing to its charm.
METF, or the Mad Meerkat ETF, was introduced as a groundbreaking decentralized ETF protocol powered by the METF token. Coined by the project team, the term DTF represented the pioneering DEX Traded Fund, a groundbreaking approach in the world of decentralized exchange-traded funds.
The project ushered in significant changes since its launch, discarding inflationary policies, implementing a hard cap on METF tokens, and eliminating bonding. Instead, a protocol profits distribution staking mechanism took center stage, designed to foster continuous buy pressure on METF and reward steadfast long-term holders.
The overarching goal of METF was to diminish reliance on inflationary mechanics, prioritizing METF token capital appreciation. Profits from the METF Assets Under Management (AUM) and DEX trading fees contributed to a protocol profits distribution pool, fostering sustained token value growth.
Earning from METF came in three main avenues: bonding, staking, and price appreciation. The protocol aimed to establish a policy-controlled Decentralized ETF system on the Cronos network, optimizing for growth and wealth creation. However, later in the project all other earning avenues were scraped, and you can only earn through governance (staking pool). Staking emerged as a passive, long-term strategy, with a growing METF stake resulting in a falling cost basis, potentially outpacing market price drops over time. Tell me…
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