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1/ The past months taught me that #Ethereum's most significant value prop to date seems to have been creating a community of yield junkies, w/ every project scrambling to offer yield.
There've been parallels in other industries, and they're not all that pretty. Take @GM for one.
There've been parallels in other industries, and they're not all that pretty. Take @GM for one.
2/ In the 2000's, @Toyota's market share in US was rapidly growing, while @GM was sliding. In 2008, more US consumers bought foreign-made cars than ones in America for the 1st time.
Faced w/ onslaught of competition, GM scrambled to offer incentives to hold onto market share.
Faced w/ onslaught of competition, GM scrambled to offer incentives to hold onto market share.
3/ Running heavy ad campaigns and by offering cash-back incentives of $500-$7000 for each purchase, GM's sales were on the rise again. It seemed to work!
4/ But in the long run, incentives actually led to erosion of GM's profit margins, putting them in the red thanks to the incentives.
By 2007, now losing $729 per vehicle, in large part due to cash-back incentives, GM reduced the incentives.
By 2007, now losing $729 per vehicle, in large part due to cash-back incentives, GM reduced the incentives.
5/ Sales plummeted. To quote @simonsinek: "No cash, no customers...the auto industry had effectively created cash-back junkies out of customers, building an expectation that there's no such thing as full price."
Source: Start With Why by @simonsinek
TLDR
Source: Start With Why by @simonsinek
TLDR
6/ TLDR: Manipulations like yield farming and cash back might work well in the short term, but is unlikely to build loyalty in the long term.
It's exchanging long term sustainability for short term success.
Let's go back to building things that provide value for the long term.
It's exchanging long term sustainability for short term success.
Let's go back to building things that provide value for the long term.
