2026-01-12 21:37:48

How to evaluate the true value of a DeFi protocol? This question is far more complex than just looking at the on-chain numbers.

Consider two extreme scenarios:

One is a seemingly impressive protocol — TVL reaching $100 million, but $95 million of that comes from rental liquidity provided by market makers, who secretly receive a 15% APY subsidy. The protocol itself is owned 25% by venture capitalists. On the surface, it looks prosperous, but in reality, it’s inflated — genuine organic liquidity is only $5 million, with the rest maintained through burning money.

The other is much more modest — $5 million TVL, zero VC equity dilution, zero rental costs, zero additional operational expenses. All growth comes from actual users, with no hidden incentives or market maker subsidies.

From a sustainability perspective, the latter is truly a healthy ecosystem. The former’s liquidity would evaporate immediately if subsidies run out, putting the protocol at risk. Of course, this also reflects the current market situation — many projects resort to hidden incentives and inflated data to attract funding and attention.

This prompts every ecosystem participant to consider: Are you pursuing shiny numbers, or genuine value?

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TokenEconomist

· 01-13 14:52

actually, the tvl metrics are completely gamed. $95m of rented liquidity just means the protocol is literally renting its own credibility lol

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potentially_notable

· 01-12 21:47

I'll provide the comments directly: --- Authentic organic users > inflated data, no matter how much you emphasize this. A $100m TVL looks impressive, but 95% of it is rental liquidity... truly outrageous. --- Another VC project exposed, and this time they still dare to use 15% APY to siphon funds. --- Basically, it's a money-burning game. Subsidies stop, and the true nature is immediately revealed. I'd rather have a genuine $5m than a虚假的 $100m. --- So how can we now determine if a project is fooling itself? Is there a quick method? --- The example of a healthy ecosystem sounds too idealistic. Are there such DeFi projects in reality... --- VC holding 25% and still daring to claim their ecosystem is healthy, laughable. --- Now I understand why so many projects ultimately fail; from the start, they were castles in the air.

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LiquidationWatcher

· 01-12 21:46

It's all just fabricated; once the subsidies stop, it instantly drops to zero. What's the difference between this and a Ponzi scheme?

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AlphaLeaker

· 01-12 21:45

Projects with hundreds of billions in TVL are actually paper tigers; the ones that truly survive are the unassuming little things...

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OnchainDetective

· 01-12 21:43

The 100m TVL looks impressive, but 95m is all borrowed... Isn't this just the eve of PND? Truly outrageous.