Governance token liquidity pools

Governance tokens (UNI, CAKE, JOE, BOO) paired with their corresponding crypto (UNI – ETH; CAKE – BNB; JOE – AVAX; BOO – FTM) typically yield higher farm rewards than their Crypto/Stablecoin (AVAX/USDC, ..) pairing counterparts. For example, on Trader Joe for AVALANCHE it’s 15% APR for USDC/AVAX pair 50% APR for JOE/AVAX pool.

Personally I think there are several risks involved when holding governance tokens:

\- they are highly inflationary, driving the token’s price down

\- they are “free” incentive, people are periodically selling them and driving the price down

\- in market crashes they dump harder as people get out of the market and take profits on token that they got “for free”

\- depends not only on the success of the corresponding crypto, but also on its exchange. If a new and more succesful exchange emerges, I imagine the money would flow from old exchange to new exchange, driving the governance token price down

\- they do not have use case outside of the exchange


Combined with compounding tool like beefy finance, governance token yields are very attractive, however I’m not sure if it’s worth the risk in holding long term. **What are your thoughts on this?**

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1 thought on “Governance token liquidity pools”

  1. CAKE is highly inflationary token. so it gets dump always

    JOE will undergo a tokenomics change. you can stake JOE to rJOE as launchpad. or to sJOE, which pays in stablecoins as revenue share (not yet, part of roadmap) and there is another one.

    BOO can be staked as xBOO. xBOO earns more BOO. plus a farm reward of your choice.

    from UNI, CAKE, JOE, BOO. . . JOE seems to be upgrading its utility for the upcoming sJOE staking and might reduce the sell pressure on JOE.

    for BOO / xBOO, they are a recepient of Andre ve(3,3) solidly NFT. so if they can direct incentives to their protocols, staking xBOO will be profitable to stakers, who it might reduce selling pressure too.


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