Sun

Not correct. Because the USDG supply is being supplied as borrowable capital, meaning 80-90% of it gets borrowed and potentially redeemed for underlying. So if you look at the amount of “deposits” only like 20% of that supply is earning tbill yield. GDN might pay for deposits but then it’s just their marketing spend again, not real sustainable incentives.

There will always be some incentive campaign going on. In fact as more serious businesses enter the space and compete for liquidity, I expect incentives to increase exponentially. The important question is: can your infrastructure access the wide universe of yield (including all of the various incentive programs that exist). If it cannot, you have no choice but to foot the bill for growth.

This is one of the best breakdowns on crypto incentive campaigns, how incentives are coordinated across different infra providers, and "where does the yield come from" Paige's post also led to some timeline revelations on how much money some DeFi protocols are willing to pay for distribution. It has me thinking about the evolution of airdrop farming activities Crypto incentive campaigns are multi-dimensional: - A budgeted ~$1.9k/day for a year via Merkl to hold the target 7% rate - Ethena bootstrapping its own USDe/USDG market with ~$160k - Morpho supposedly paying up to $150M in their token to secure the deal with Robinhood for retail distribution and brand legitimacy - A positive spread between the spUSDG collateral and USDG borrowing costs - Likely reserve yield USDG's float All to provide the headline 7% APY from a well-trusted fintech giant This is up from Kraken and Veda's 6% earn launch in January. All this budget is coordinated to capture retail at scale and should be seen as a CAC cost, a redirection from airdrop campaigns: who will be next to provide 8% APY through incentives?

There will always be some incentive campaign going on. In fact as more serious businesses enter the space and compete for liquidity, I expect incentives to increase exponentially. The important question is: can your infrastructure access the wide universe of yield (including all of the various incentive programs that exist). If it cannot, you have no choice but to foot the bill for growth.

There will always be some incentive campaign going on. In fact as more serious businesses enter the space and compete for liquidity, I expect incentives to increase exponentially. The important question is: can your infrastructure access the wide universe of yield (including all of the various incentive programs that exist). If it cannot, you have no choice but to foot the bill for growth.