2025-12-31 15:20:17

There is a common question in the crypto market: why do some projects make millions daily, yet their tokens become worthless paper?

A leading DEX is a living example. As a top exchange, with daily fees reaching several million dollars, what about the token holders? They haven't received a single cent in long-term dividends. This phenomenon has given rise to the "uselessness of governance tokens" argument, and many people have been complaining about it.

Recently, a proposal to burn 100 million tokens has been seen by many as a turning point for such projects from "pure governance" to "value capture." Honestly, I think it's more like gambling with one's life. If you win, everyone is happy; if you lose, you might never recover.

Let me clarify the basic concept: the dividing line between governance tokens and value tokens ultimately depends on whether they can share project profits. In the past, holding tokens only allowed you to vote, and even voting against the project might have been useless (just look at the 99.9% approval rate this time), let alone sharing in the project's earnings.

The logic of this proposal is to convert part of the trading fees into protocol revenue, used to buy back and burn tokens. On the surface, token holders benefit indirectly—burning reduces circulation, increasing token scarcity, and theoretically driving up the price. It indeed opens a window for value distribution.

But that's where the problem lies—at an extremely heavy cost. To obtain this protocol revenue, the project has cut into liquidity providers' earnings, reducing their profits by one-sixth. From another perspective, liquidity is the foundation of a DEX, and LPs are the very root of that foundation. Without liquidity providers, this DEX becomes an empty shell.

It's like a restaurant owner giving dividends to shareholders by cutting salaries for chefs and staff. In the short term, the numbers might look good on paper, but in the long run, talented staff will leave, and the restaurant's competitiveness will be gradually eroded.

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MetaverseVagabond

· 4h ago

It's the same old trick of cutting LP again, truly unbelievable. Basically, it's about using destruction to prolong life, and LP gets the worst of it. Seeing this 99.9% approval rate is just ridiculous, what’s the point of voting?

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SneakyFlashloan

· 10h ago

Basically, it's killing the goose that lays the golden eggs. What's the point of DEX if LPs have left? I'm tired of the rhetoric about token burning. The real beneficiaries are still the treasury and early token holders. 99.9% approval rate? This governance is laughable. Might as well just be a dictatorship.

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quietly_staking

· 10h ago

Wait, reducing LP yields to buy back and burn? Isn't that just robbing Peter to pay Paul? In the end, the ecosystem itself suffers. --- 99.9% success rate, hilarious. This voting itself is meaningless. --- Basically, it's just trying to trick token holders into believing in scarcity, but in reality, it's overdrawing the ecosystem. --- Liquidity is the lifeline. Now they're directly cutting the legs of LPs. Are they trying to kill the DEX? --- Short-term pump, long-term deadlock. I bet five bucks I'll end up regretting the proposal. --- Sounds good, but it feels like a suicidal market rescue. --- Why does this routine feel so familiar? Every time, it's promises of dividends, but in the end, not a penny is paid.

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FOMOmonster

· 10h ago

Is it that same story of burning and buyback again? Can it really save the market? Reducing LP earnings by one-sixth is a bold move; it's already good if the short-term stock price can rise. Governance tokens = worthless tokens, that's the industry consensus, right?

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