As the competition keeps heating up in the world of decentralized finance, service providers need to keep pushing the boundaries of innovation. The first generation of DeFi products and services shows there's room for improvement across multiple aspects. A strong focus on being rug-proof, accessible, and having solid tokenomics will prove crucial for new market entrants.
Raising The Bar In DeFi
The first generation of decentralized finance products and services has shown that developers can do much better. Dozens of projects have suffered from hacks, thefts, or rug-pulls, all of which put investors' money at risk for no apparent reason. When millions of dollars in funds get stolen, many disgruntled people want to see things done a bit differently. Thankfully, developers are paying attention to make DeFi more accessible and safer to use.
One of the promising trends currently in the space is providing rug-proof security. Rug-pulls remain a pressing problem, wherein anyone who creates a token can decide to pack up their liquidity and leave everyone else holding worthless tokens. That practice occurs more than some may think, as dozens of tokens come and go across decentralized trading platforms every day.
The best way for developers to ensure no rug-pulls is to commit liquidity for a longer period. Locked liquidity ensures there will always be enough volume to support trades, rather than seeing everything disappear overnight. However, it does not prevent volatile price swings. Projects like UltraSafe introduce an automatic partial fee distribution to the liquidity pool which continually increases the price floor. As such, every time someone sells, the price impact will lessen.
Furthermore, Ultrasafe sets an interesting tokenomics example by introducing an 8% transaction fee. That in itself is not too remarkable, yet half of the fee goes to the liquidity pool for the price floor. The remaining half is reflected to holders of the native token, creating an incentive to hold the token over time. Thus, continually seeing one's balance go up can prove worthwhile to many traders and enthusiasts globally.
What Else Is There For UltraSafe?
While the fundamentals above are promising, new DeFi projects need to offer a solid package to convince users. Attracting speculators is not the primary objective when incentivizing long-term holders through reflections on every transaction. Instead, users need a reason to check out the project and to keep coming back. That is never an easy feat in a very competitive industry like decentralized finance.
UltraSafe positions itself as a frictionless yield protocol where users can earn passive income and benefit from value appreciation. Thanks to this solid community-oriented focus, the team also aligns its development progress with the growth of the overall community. More token holders will help develop new features and services, creating an extra incentive for holders to talk about UltraSafe with their friends and family.
For DeFi and other cryptocurrency projects, there are several crucial fundamentals to focus on. A transparent tokenomics approach will avoid a lot of confusion later on. Empowering users through reflections and providing a rug-proof guarantee is what can set projects like Ultrasafe apart from the rest. Even though a lot of trust has been lost in DeFi, it is not too late to turn the ship around.
Furthermore, linking community growth to the development roadmap is another form of user empowerment. Projects need to incentivize users to look for long-term opportunities rather than buying into a token and flipping it for profit the same day. Creating sustainable decentralized finance initiatives will elevate this industry's appeal to a new level and pave the way for broader adoption.